Flip rehab vs rental rehab

[Joshua Chen]

Do rentals need rehab the same way flips do? And if they do, is it usually the same degree of rehab?

[Terri Pour-Rastegar]

I'm not familiar with your market or exactly what sorts of properties you're targeting, so I can share only my experience in my market. 

Mostly, I buy-and-hold as a rental. I fix up my rentals a little more nicely than the average landlord around here, but I also get top dollar because my houses are in great shape.  So I'm focusing on durability first, but it also must be visually and functionally appealing to a tenant. 

• If cabinets are in good condition, they get a facelift: new hardware, paint, etc. 
• If the cabinets are not so great, I replace with new, all-wood construction cabs.
• New laminate counter tops
• New appliances
• Ideally, I tile all kitchens and baths.  My second choice is quality sheet vinyl.
• Remove all carpet and refinish the hardwoods that are usually already there; or install new real hardwood.  I have a zero tolerance policy for carpeting.
• I often replace old windows with new energy efficient units.
• Fresh paint throughout--choose one wall color, one ceiling color and one trim color from the same brand and use it for every house.  You'll thank me later.
• Replace outdated light fixtures
• Take care of all obvious repair or maintenance issues.
• Upgrade electrical panel if necessary--I don't mess around with electricity.
• Service the HVAC system
• If a house has only central heat but not AC, I install a new system.
• I have a plumber go through the house thoroughly to make sure everything is in good condition; if it isn't, he fixes it.

There's more, I'm sure, but I'm blanking out.  LOL.

As for flips, I do much of the same; however, I'm more likely to replace the entire kitchen, maybe re-configuring the layout too.  Granite counters, tile floors, nice back splash feature, add can lights, stainless appliances, etc.  I'll fully update all baths--new everything.  I'll try to enlarge closets and upgrade laundry areas and such.  I'll do a nicer paint color scheme with higher grade paint and maybe accent walls and such.  I'll definitely update the exterior as well, like if it needs new siding and doors.  Landscaping will get the VIP treatment.  With a rental, I just make the landscaping/lawn easy to care for.  It's always a toss-up when it comes to upgrading electrical, plumbing, and HVAC systems because, while those are some of the first things I look at when considering an investment, most home buyers don't have the first clue.  Replacing them before listing the house, I think, is a waste of money--it's not going to increase your asking price (it should, but it won't).  Any problems will be discovered in the buyer's inspection period and can then be remedied through repair or negotiation.

There's a lot more to all of this, of course. However, the bottom line for me is this:  If I'm keeping it for a rental, I'm in for the long haul, so I want everything to function as smoothly as possible and be relatively low maintenance.  If I'm flipping, it has to look amazing first and foremost, but also have what buyers in that area are looking for.  

Hope this helps.