how much rehab if you are going to rent it?

[George P.]

this is a continuation of my previous thread about the deal i am working on. want your opinions, please.

details:

asking price - 80k
accepted - 63k
75% LTV
cash to the table - ~$18k
rent(good condition) - 1,150-1,250

to get it to that condition, we are talking about 17-20k(max).

mostly outdoor stuff like roof, windows, trim, gutters,insulation.

Indoor - paint, carpet, doors. Bath needs update, but not full gut (around 2k at most).Just cosmetic stuff indoors

so, trying to determine if it's good idea to spend under 20k to get renters for $1,150/month.
The big items are capital investments, so once i change them, i'd not have to change it for many may years.

feedback is appreciated, plz.
:mrgreen:

house is worth easily 100 in great condition. easy.

[Mitch Kronowit]

Originally posted by Homer S.:

The roof is not leaking, but it has 3 layers of shingles. it might start leaking soon. the steel windows dont open and look horrible on the inside... that's why i'd rather change the plumbing to pex before a tenant moves in than to get a call that the water is rusty.

Homer, I can appreciate the fact you want to make your rental nice so it'll attract a good tenant. That's in my rule book as well. But I see you're trying to fix problems that don't exist, yet.

The roof MIGHT start leaking soon? According to who? A call that the water is "rusty"? Is it not rusty now?

I would concentrate on getting the place cleaned up, looking nice, and everything working properly. If that means new windows because the old ones won't open, so be it. However, I would still check into repairing them before replacement (new rollers and a good track cleaning). I would also look at inexpensive no-frills windows instead of premium high-dollar low-e exotic glazing. I would leave the roof alone until I had a real problem. One of my property managers was told his roof had 5 years left on it. That was 13 years ago! If the plumbing is iron, I would definitely plan on repiping at some point, but not before it started tainting the water or springing monthly leaks. Who knows when that'll happen?

I'd keep the money for these "repairs" in reserve. Who knows, the furnace or water heater may blow up before the roof or plumbing starts causing problems and you want to have the funds available for that.