Updated almost 13 years ago on . Most recent reply
Different house "price packages"
In a previous thread there was a discussion (http://www.biggerpockets.com/forums/52/topics/85368-what-potential-breakables-do-you-remove-from-a-property-prior-to-renting-it) about what to take out of a rental to reduce future repair costs. After watching Rent-A-Paycheck deliver a washer and dryer to my rental (and after ensuring they did a proper hookup), and reading The Landlord's Survival Guide, I'm thinking that there must be a way to balance acceptable risk of repair with increased profits.
The Survival Guide suggests making different "package" levels, the equivalent of, say, a small, medium, or large fast-food meal. The small, or basic, level is the property without any upgrades. The upper level includes upgrades that few tenants would be willing to pay for; however, it makes the medium level seem more appealing and budget-minded. It says:
I could price competitively against the rental centers (which IIRC end up being 2-3 times the MSRP when paid over their financing period) and purchase new under warranty (and pay for it with a credit card that extends that warranty for another year). I'd also get the warm fuzzy feeling of providing a service at a reasonable profit while steering them away from predatory places.
In order to work, I can see problem areas that would have to be addressed. First, I'd have to target long-term tenants - someone who would be there long enough to pay for the upgrade. Moving out early makes for the need to reconfigure "upgrades" too often, and the existing upgrades lose the shiny new house look.
Second, a warranty isn't going to cover tenant stupidity, so there's still risk there.
Third, there's the additional cost of money, time, and frustration when there is a problem, even when it's under warranty.
What do you do? What works?