Rental Rehab calculations

[Peter Bardou]

Hey everyone!

I am getting ready to rehab a kitchen and bathroom in a 2 bed 1 bath unit. I am doing all of the work myself. The estimated budget for the rehab is as follows:

The rent increase will be $200 on the unit, going from $725 to $925 or a 27.5% increase. I absolutely feel like this is a no brainer because i am doing the work. IF, i were to pay contractors to complete the work, i would add at least 50% to that total if not more....IS IT WORTH THE REHAB? as a DIY is it worth the rehab in terms of ROI

I can currently bring the unit up to $800/month with a turnover and zero rehab.....THOUGHTS?

plumbing and electric is being done by family members for cost of materials :-)

[Alex Deacon]

@Peter Bardou its absolutely worth the investment but here is the CRITICAL question. If this will take you 6 months to get done then what have you really gained. If you do this then it needs to be done ASAP otherwise pay someone to do it if they can get it done in 1 month. Easier said then done I know.  Good contractors who are reasonable and professional and can meet a deadline are pretty hard to find. The key is time verses the amount of rent you will lose.

Good Luck to you

[Peter Bardou]

@Alex Deacon I did forget to mention that my work schedule is extremely flexible and i have given myself a 6 week time table to complete the work. The unit is already rented for $925, and tenants move in mid april. Obviously the move in is contingent on the completion of work. I do have help on the project as well. 

I will not be gutting the kitchen or Bath to the studs, its mostly cosmetic work. 1 month to complete work, 2 weeks for unknown

[Jim Goebel]

Cool! If you hit your numbers you'll have a quick payback.  Kudos to you for taking it on.

Seems pretty reasonable to me and if you are doing the work yourself I think you'll find some of your numbers are high and some are low (but you won't know that in advance).  How are you doing counters for $300?  I have posted in the past on doing granite and would highly recommend using a hard surface (for longevity and beauty) but of course not at retail prices.

[Peter Bardou]

@Jim Goebel Laminate countertops. This is not a high end rental. You can buy mitered pieces at home depot or lowes relatively cheaply. I picked up a set of very nice cabinets that my uncle just took out of a kitchen that was only 7 years old that are going to almost perfectly fit in the space i have to work with. 

I think my numbers are relatively reasonable, and i added 15% onto them as well for the unknown because NOTHING goes as planned. 

[Jill F.]

We are doing the same thing. We've done10 kitchen in the last 18 months. What is the linear feet of counter top in the kitchen? square footage of space? Where is ceiling fan being installed?

[Peter Bardou]

@Jill F. I am not 100% positive about the Linear feet of countertops yet. the estimate is on 2- 10' mitered laminate countertops. I have attached a picture of the space. the kitchen is 13 x 11. Ceiling fan will be going in the middle of the kitchen

i am rearranging the kitchen a bit and adding a dishwasher

[Jill F.]

Hi peter, You should be able to beat your estimates on everything except possibly backsplash tile-- and it makes such a big statement it's great place to splurge. We have been using an adhesive product from lowes called musclebound instead of thinset. We had it installed on the face of a bar in a retail store for 2 years and it really held up. It saves tons of tearout and install time-- it goes right over existing backsplash. We have been getting great deals on vent hoods on ebay. Is that stove on an outside wall? If you can self install easily, ducted hoods work so much better. Personally I'd skip the ceiling fan and get an 18" 2000-2500 lumen 4000k led light to save on long-term maintenance and provide better kitchen lighting $50 on amazon. If you go with a vinyl Click plank you can come in less than $2/ft on flooring.home depot or floorstoyourhome.com I have been adding restaurant style sprayer faucets off Amazon for about $60 and under cabinet lighting $40 to make a statement. Tenants love them. Havefun. I love doing pretty kitchens. Pics of new cabinets? I can't get the@ to work from my tablet :(

[Peter Bardou]

@Jill F. that is all awesome info! Yes the stove is on an outside wall and i actually did toy with venting it, that will depend on the time i have as well. 

great suggestions on the light, i do use a home depot version of the light you described in other units and that may be a good spot to save some money. 

I am going to consider all of your suggestions actually!!

The cabinets are going to be painted a chelsea gray by benjamin moore that i have left over from another project. I think overall the kitchen is going to look very modern with the plans i have and attract great tenants. This property is in a quiet single family neighborhood so i always have great tenants. (attached are the cabinets before being pulled out of the old kitchen they came from)

I have also linked the backsplash i have my eye on for this :  https://www.homedepot.com/p/Daltile-Matte-White-12-in-x-12-in-x-6-mm-Ceramic-Octagon-Dot-Mosaic-Tile-10-sq-ft-case-65012OCT01CC1P2/100187756

[Peter Bardou]

@Jill F. this is my ROUGH drawing from my ipad pro of how im going to install the newer cabinets. The red markings are where ill bring the backsplash all the way up the wall and im going to put in a custom floating shelf ill make myself 

[Jill F.]

Oh i just love grey cabinets. I bet that will be beautiful! Please post after pics when you're done!