How far to go with fixing up rentals? Best way of doing them?

[Joshua D.]

So me and my wife have a real estate rental business lots of equity behind them. Question is im getting alot of projects coming up. Wondering if should do rental properties up to the max from the beginning or bare minimum? Does it pay off to gut them and do them up brand new or keeping the crappy stuff in them and have to deal with it one day? We have alto of turn around now and my main question is it worth making the upfront investment of doing them up completely? So maybe good for another 30 years? Thoughts? in Beginning we didnt have alot of capital to fix them up now we do and im thinking to expand and keep moving its right to do them right the first time? Thoughts please really would help me out that im in the middle of big projects now.

[Greg Kurzner]

Hi Joshua, my input as a manager for both individuals and institutions is as follows...if you aren't selling them, completely updating homes may be something you do gradually.  Maybe if your home becomes non-competitive with others or you can't get reasonable rent then updating substantially could be worth doing.  Things you can do short of total rehab that add substantial value and appeal and which don't cost a ton are moving to LVP (Luxury Vinyl Tile) from float vinyl or carpet, upgrading appliances and putting a lower end granite on the counters and vanities.  Keeping systems and roof current are essential but cosmetically, making changes to appliances, countertops, flooring will make a big difference in most homes, keep you current and stop you short of totally re-doing.  

Alternatively, waiting will erode rent potential and when you do have to have work done, the scope will be larger...doing the above will likely do enough to keep you competitive and avoid large capital expenditures all at once.  My two cents.

Greg Kurzner

Atlantic Property Management

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