Deciding on WHAT to Rehab

[Matthew Chen]

Hi all, first time investor here looking at OOS rental properties from Los Angeles. Have been reading these forums, The Book on Rental Property Investing and browsing reddit. I am getting confused about the concept of Rehabing.

I understand there are different types of things to rehab and there are ways to estimate the cost of rehabing but how do we decide WHAT to rehab?

Should these decisions be deferred to a contractor? For example, could one ask, "what are the most cost effective improvements to this property"? I would find it difficult to say, these walls need changing, we should update the kitchen, etc. and then decide exactly what to do to them. I haven't found many good resources on this yet and I've heard rehabing is a great way to force appreciation and "make good deals".

Thanks all.

[John Teachout]

For rentals, while we call it rehabbing, much of what we do is "repairing". For example, today I was patching holes in sheetrock. Some of it was spackling and some actually installing patches. I also had to replace a broken window by replacing the entire window, not just the sash. This property is getting a new exterior door installed due to damage to the existing one. So a rehab for a rental is not just to make it look nicer, it's to make it safe, comfortable and cosmetically acceptable. The type of property will determine what upgrades may be needed but for most of ours we're making them a solid rental that someone would be happy to live in. If you're not there doing the work yourself, expect it to cost considerably more than you thought it would (probably double). Managing rehabs from a distance is very difficult unless you have experience.