Updating kitchen and bath in San Jose, CA

[Emily Wilson]

I own a SFH 3 bed/3 ba 1930's bungalow in downtown SJ where I currently live. I would like to relocate in the next year or 2 but rather than selling, I was thinking of renting out the house. The previous owner installed an Ikea based kitchen with granite counter tops in about 2003. I've been impressed with it all these years, but it is getting a little shabby now (the laminate is peeling on a couple of the cabinets etc.) I don't think it looks that bad now, but I think it will in probably 2-3 years

If you are reading this you probably live/invest in CA and know that one of the challenges of anything in real estate is how expensive it is.  I received a quote for about 25k for a remodel.  When thinking of the updates as an investor rather than a home owner, it makes me wonder about what amount of updating is worth it.  

#1 How do people calculate things like the cost of updates in terms of increase rental value. If it raised the rent by $100, that would take about 20 years to pay off - just in time for the next kitchen update.  And I'm not sure even how to figure out whether it would increase the rent or not.

#2 Which brings me to my next point.  Is there another angle I should be looking at?  Does it increase my applicant pool and interest from people who are more likely to pay on time and have steady occupancy?  If so, how do people calculate the value of that?

#3 Are there any tax implications or things I should know if I update for my own use starting this summer vs. right before moving out next summer?

#4 What do other investors do to get something that is solid construction and will be durable and look nice but not pay for luxury remodeling? 

Thanks for the insight for this newbie investor.