How much should I invest in improving a rental property?

[Steve S.]

As some of you may recall, I'm buying the house I grew up in as my first rental property. My parents have taken good care of it but it's a 38 year old house. They've been empty nesting for about 12 years. That said, there's little things here and there that, if I were selling it, I would certainly fix. However, since I'm going to be renting it, should I invest the time and money into doc long it up to the same level? For example, it was probably painted about 11 years ago. If I were selling it, I would paint it. Should I paint it for a tenant? Other things are on the outside of the house that could have some wood replaced here and there. Roof was replaced about 7 years ago. It's a 30 year roof. So my questions are more general in nature about how much to pour into something that someone is probably not goi g to take as good a care of if they owned it. Another argument would be to fix it up that way when they leave I know exactly what they destroyed and can keep some of there security deposit.

[Kevin Fox]

Originally posted by @Mark Holencik:

Originally posted by @Kevin Fox:

Originally posted by @Mark Holencik:

If the paint is good leave it. Fix rotton wood. Upgrading is not necessary.

 Be careful not to make assumptions about what holds true across different markets. 

While upgrading may not be needed where you invest, there are other markets where it is absolutely a necessity.

I can't provide much insight on the market the OP is investing in, but it's important to note that upgrades aren't always an unnecessary burden. 

I made no assumptions about the market. I was addressing the investor. He is buying his first rental. He is getting his feet wet for the first time. Doing more then the mininium to get it presentable may not be the best investment of his money. 

And I knew everyone else would tell him to fix everything and upgrade.

 I understand where you're coming from, but whether this is his first investment or one thousandth, the market doesn't care. What is considered 'presentable' varies DRASTICALLY from state to state, city to city, neighborhood to neighborhood; shoot, sometimes even block to block. I completely agree he shouldn't stretch himself to thin or build beyond the point which he'll receive an ample marginal return on cost; but I do think it would be misguided to state that upgrades, in every case regardless of the market, are unnecessary.

Unfortunately, sometimes upgrades ARE APART of doing the minimum to get it presentable for the market it's in.