What do you focus on most when rehabbing a rental?

[Dion Martorella]

I'd like to hear from some experienced rental property investors about what you focus on in your markets when rehabbing a rental. I hear a lot of people say kitchens, floors, paint, etc. Do any of you replaces furnaces, HVAC systems? Do you do full guts? Would love to hear what most of you are doing.

[Matt R.]

Disclaimer: I've done this exactly once.

First, you have to make sure it doesn't fall over or kill anyone.  This is stuff like fixing the foundation (uncheap), replacing rotted flooring, replacing the furnace vent pipe/flue if it's rusted out, replacing old or bad wiring, and so on.

"Fixing it so it doesn't break at 3 AM" and "making it look attractive" compete for second and third.  "Break at 3 AM" includes things like removing the icemaker hookup, installing new shut-off valves and flex lines at the sinks and toilets, and putting in a grid drain instead of a pop-up drain in the bathroom sink.  "Look attractive" is paint, countertops, and so on.

Like @Blake Garcia , I also replace all the switches, outlets, and covers.  The parts end up costing about $2 per location but it improves the look a lot.  Get the "spec grade" switches and outlets that sell for about $1 apiece, rather than the ones that cell for $0.50 apiece - the spec grade ones last longer and are nicer to install.  I like to use the nylon plates that are somewhat flexible; they're more resistant to shattering, and they also sit a little better on the wall if the wall is not perfectly flat around the outlet box. If you're doing a whole house worth, or even a whole apartment, buy the devices and plates in boxes of 10 to get a bit better price.

When replacing outlets, move any "back-stabbed" connections to the side terminal screws; this gives you a better connection and reduces the voltage drop in the circuit.  Sometimes this helps you find previous things that were done wrong (like using lamp cord inside a wall), too.

If you have to do it on the low dough show, replacing a cracked switch or outlet with one of the new 50 cent ones is a step in the right direction.  You might take a 2-prong plug around and try it in all the outlets, and replace any that are really loose on the plug.  If the old wall plates are not chipped or cracked, but have paint on them, soak them in Mr. Clean overnight and you can usually get the paint off and re-use them.

I replaced both the furnace and A/C in my SFR, because they were both about 20+ years old. They worked, but I didn't want the furnace hanging over my head in January in Kansas City, and I had planned some money for this when I bought the house.  The new A/C is more efficient just because it's newer; I chose to replace the 80% furnace with a 90%+ furnace as well.  I didn't replace the thermostat, because it was only about a year old at the time... and it failed last week, requiring a Saturday-night trip to replace it.

The bathroom had been redone in the past couple of years, so I mostly left it alone.  I did do the grid drain (above) and move the GFCI outlet for the sink a little bit, because it didn't quite fit in the previous location and was hanging part way out of the wall.

The kitchen has 1980s cabinets and countertops, but the previous owners had bought a really nice stainless oven, dishwasher, and vent hood, so I bought a stainless fridge and declared the kitchen good.  I did repaint in the kitchen.  The kitchen probably won't hold me back from renting it for a few more years, but new cabinets and countertops are on the agenda down the road a little.