Updating My First Rental Property

[Evan Ventura]

Hi everyone, I am very excited to say I have gotten my first rental property under contract! While I wait to close, myself and my business partner are trying to be as proactive as possible and decide how to best fix it up. It is a single family 3/1, just shy of 1,000 sqft, offer accepted at 145k. Very basic rehab was estimated between 10-12k by contractor. I have a couple specific questions: Granite or Formica? Counter space is very small to begin with, would it make a worthwhile difference to go the granite route for durability and aesthetic? Build a basic patio or leave it bare? The yard is quite large but leaves no where to really hang out or barbecue. Is this an important selling point? Build an outdoor shower? This home is at the Jersey Shore where this is a popular feature. A fellow landlord advised me that she always builds one if it's not already there. We are in this for the long haul, and while we strongly desire to cash flow on a monthly basis, we have full time jobs and will not be drawing from our properties for a long time. I know there are many schools of thought here, we appreciate any advice you all can offer!

[Brian Pleshek]

Also keep in mind how long it will take to recover the money for the "extras" above the lower rent amount.  If you have to spend $8000 just to get the extra $300 per month, then you will take 27 months to break even.  If the items only last 3 years before they have to be redone, then you may be better off not doing it and taking less rent.  Just make sure you figure those things in.  

Brian