How to spend (up to) $7k on a rehab for a rental

Question

Good evening all,

This is for a rental (unless I get a great offer at the end) but there wasn't a spot for asking rehab questions in the landlord forums.

Short background: 1600sq ft SFR that should get $900-$1000/mo rent (decent neighborhood but rents are on the low end...I'd like to up them!). After needed repairs (which includes new cabinetry in the bathrooms) and some light landscaping I'll have about $7k to use on more "discretionary" rehab items. This will be night and weekend project for me and since time is of the essence I'll pay a sub for some work and do other work myself. I'd greatly appreciate your thoughts on the best bang for the buck (and if I need to spend the entire budget). If I spend then entire amount I'll be at about 20% CoC.

My List of potential rehab items in rough order:

- Replace all carpet/existing laminate with new laminate (approx 1200sq ft) (do it myself)

- Tile bathrooms/kitchen (approx 400sq ft) (not sure)

- Remove popcorn ceiling throughout (do it myself)

- Paint walls / trim (contract)

- Move a/c unit (contract)

- Paint kitchen cabinets (myself)

- Move oven back to where it should be / range hood and microwave (myself)

- New countertops (contract)

- Backsplash in kitchen (not sure)

- Porch/deck off back door (not sure)

- Gutters (contract)

(First time posting pics to the forum)

What am I missing? Where am I being foolish?

Thanks in advance!

Ben

Valerie Hiscoe · Answer

From the photos, as has been mentioned, it's difficult to tell the shape that the walls and floors are in but I think that most people when newly renting a property, expect that the paint looks at least relatively fresh.  And is the paint two-toned in the bathroom?  Not a good look.

If you wanted to keep the rent status quo then you wouldn't need to do much else, as it looks pretty decent as is, but you said that you wanted to raise it so I think some of the options you suggested would go farther in achieving that goal than others - most importantly after paint - flooring and kitchen (you already said you were updating a bathroom vanity so, with paint, that's addressed).  Unless the tile is quite damaged, I'd leave that alone because merely changing it for change's sake won't get a higher rent.  Changing out the carpets, however, has a much better chance of doing so.  People will pay more for a place that looks more modern, and replacing the flooring with laminate will go a long way towards achieving that.

Which brings us to the kitchen.....which is the one place the photos are pretty clearly indicating a need for an update.  It looks like the fridge and dishwasher are stainless steel so I would definitely build on that more expensive existing upgrade and paint the cabinetry (white).  That, and changing the hardware would make a huge impact.  I'd do that before addressing the flooring because it's a bigger bang for very few bucks (a lot of work, but less than tiling).  Use a great primer (the shellac-based one from Zinsser available at most paint places is quick and effective) and you might add an additional self-leveling compound to the paint you get to save you even more work and improve the final product.  I didn't really understand the moving-the-stove reference (has it got something to do with the hole in the cabinetry under the counter-top?), and can't really make out the floor-plan, so can't comment on that too much, but the stove does look a bit random where it is, and maybe it's placement is not the best use of space, so that could be worth considering too.  Kitchens and bathrooms, always the highest priority.

So, to sum up, 1) paint (although you must really hate painting if that's something you'd sub out), 2) paint kitchen cabinets, 3) replace carpet with laminate.  Before doing any of it though, as others with more experience than I have suggested, you're probably better off checking out other places in the neighbourhood to see how much the investment would affect your rental rate.  The time element is always something that should be kept in mind as well,  I must say though, it looks like a nice place that could turn out looking great.

Valerie Hiscoe · Answer

@Andy Hudgins

Nope, not talking about self-leveling cement for the floor..... I meant an additive to put in paint that helps attain a smoother finish.  There are a few different brands (Zinsser again having one) but the one I've used is Floetrol.  That's for latex but there's another one for oil - Penetrol.  It's not their most common use apparently, but it's the one I know about.

It might be a bit 'girlie', but you can read about it at the link below.  It's painting tip #1.  And of course you'll be able to Dr. Google (?) them too.

www.thecreativityexchange.com/2012/08/favorite-painting-tips-friday-favorites.html

And you're welcome.  I think.

Thomas S. makes a good point though - I think painting the cabinets would be a definite in a flip so it depends on how seriously you're considering selling Ben.

Best of luck with it all!

John Teachout · Answer

Regarding the ceiling work, this is one item you should consider hiring a pro to do. Often popcorn, orange peel or other textures are put on drywall in lieu of extensive drywall finishing. If you scrape off the texture, you will probably need someone to do some tape work and  slick the ceilings to make them look good.

Simon Castillo · Answer

Ben

You've received great advice thus far. My observation though is if you put in all the repair money into this house, your margin may not be enough to warrant selling at this time. Make the necessary repairs and enjoy the cash flow.

Ben H. · Answer

Thanks all for the considered replies. very helpful to get some other perspective beyond than that which is running between my ears.

@David Goings, the plan is to set it up as For Sale or Rent...but the initial interest was as a rental in an area that I am sure will appreciate in the next 5 years or so (3 blocks from the river with a great waterfront park and larger homes going in about a half-mile or so away). (Oh, I also saw that story previously...thanks for reminding me about it!)

@Valerie Hiscoe, NO, I'm not interested in painting the whole house on my own! But the painting has to be done so that is absolutely top of the list. The main bathroom has to be gutted due to some mold and floor damage so new cabinets and I'll go ahead and likely tile that bathroom while I'm at it (since the floor is coming up anyway). Thanks for the thoughts on the kitchen cabinets. They are in decent shape for now and I will likely paint them at some point in the future. The flooring in the kitchen (which leads to the 2nd bathroom/laundry room) is cheap roll laminate though in decent condition. Will probably leave that be for now as well. Great suggestion on new hardware and fixtures. Will take a closer look next time I get into the property. Yes, moving the stove has everything to do with its current "orphaned" location in the middle of a blank wall and the hole in the cabinetry. Moving the oven will also re-open the breakfast nook so that is a must happen. To do that will require new countertop.

@John Teachout, the jury appears to be out on whether to replace the carpets with laminate or not. The front room/sitting room (not pictured) and hallway all run together and I will likely have to replace that laminate given some water damage in one area. The rest of the flooring is ok but I've heard so much about the long-term durability of laminate I'm tempted to just go ahead and make that investment. Will make a final call next visit to the house. As for the popcorn ceilings...it will have to come down in the living room given, again, water damage but I'll leave it up in the rest of the house.

So with all that said, I think my current plan is as follows:

1) Main bathroom- fix problems and tile (Has to happen)

2) Paint walls/trim throughout (Needs to happen)

3) Fix water damage areas (remove popcorn ceiling/repaint // replace laminate floor in damaged area if required) (Needs to happen)

4) Move oven (and fridge) in kitchen; re-do countertop as a result; update hardware and faucet if warranted. (Recommended action)

5) Porch/deck off back of house (Recommended action)

6) Backsplash in kitchen (Nice to have)

Those items should not take all $7k. Will report back.

Thanks again.

Ben

Valerie Hiscoe · Answer

In case anyone is curious about the shellac-based Zinsser primer (a lot of people are familiar with BIN and 1-2-3 but not the shellac one), it's awesome because 1.) it's as thin as water so really fast and easy to apply, 2.) it dries in about 15 minutes, recoat in 45 minutes, 3.) it's got great coverage over every colour, and 4.) it sticks and stays on tile in a shower.  For two years that I know of.

So it's pretty good.

Andy Hudgins · Answer

@Valerie Hiscoe That's very interesting. Thank you.

Thomas S. · Answer

I would replace carpets with laminate if they are older and warn or stained, paint where necessary and replace counter tops if damaged. Aside from that only items that would be your labour/no cost.

The rent price point does not warrant any other upgrades.

If your intention is to sell the work should be entirely different. Selling and renting are different animals and not comparable in regards to upgrades and spending money.

Andy Hudgins · Answer

@Valerie Hiscoe I'm here to learn Ms. Valerie....add leveling primer for the cabinets or the floor??? Plus, I've heard of self-leveling cement eons ago ---- but self-leveling paint? This is a first. Yeah, I just looked it up at Dr. Google.  Will you please elaborate a smidge? And THANKS!!!

How to spend (up to) $7k on a rehab for a rental

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