Replacement windows for lower-end rental

[Ross Smith]

Hello everybody,

  I'm working on my 2nd rental property.  This is a 1940's vintage house.  The exterior is vinyl siding and decent shape.  We have remodeled the kitchen, repainted and replaced flooring throughout.  It is in a lower end area.  I purchased for in the upper 20k's and have invested about another $6k so far and am almost done.

The current windows are the original wooden ones.  They are fairly loose and leaky.  All of the weight cords have been cut.  The house does have air conditioning and a gas furnace.

I'm trying to decide whether to repaint them or replace them prior to my 1st tenant.  The exterior paint is fairly rough currently and peeling off.  There are 11 and they are about 31" x 62" tall.  I've been quoted $600 to repaint them all or $1000 by the same person to install new ones.  Looks like I can get replacement basic ones for $1980 for a total installed of about $3000.

I'm hoping to ask about $650/month or so for the SFR. Just trying to get thoughts on if I should repaint or replace the windows. I wasn't planning on originally replacing them, but with all of the other work it seems like the last major issue with the house. I was hoping to only be in for about $5-$6k on the house. With the windows and bit more work I'm looking at more like $10k total. I can spend the money, just hoping for a high cap rate.

Any thoughts?  Thanks.