Asking for a friend; Getting house rent ready

[Jarrid Perusse]

I bought a house 2.5 yrs ago near DT Orlando, house is a 2/2 & 1/1 duplex, and up to now I have mostly been renting it out to friends as it is also currently my primary residence. That being said I am ready to move into something different and rent out the house entirely. There is some repairs/upgrades that need to be done as well.     

My question is about determining what is worth spending money on for the best value & budgeting how much to invest in?  Any guidance or metrics I could evaluate would be most helpful! 

[Randall Alan]

@Jarrid Perusse

I think you have to look at your competition (other homes in the neighborhood) to determine what your house is lacking to make it competitive to the others in the neighborhood.  We know nothing of your neighborhood... is it an A class neighborhood where formica cabinets would be a faux-pas, or is it a C class neighborhood where "who the heck cares what the cabinets are made of... if it has 2 bedrooms and a working AC you are good to go!"

So it's less about the money, and more about what the tenants in that neighborhood are going to expect for the price being charged.  For a C class rental I would probably paint the walls / ceiling if they show wear; fix any dilapidated issues with cabinets / plumbing / floors / fixtures / doors / windows.  In short, I'm not going to go remodel something that isn't broken for a C class neighborhood.  

If there are things that are needing to be replaced, I am going to rehab to the level of the neighborhood.  This means I'm not going to put granite into a house that has formica cabinets.  It means I'm not going to put a new bathroom or kitchen in if the one that is there is already working.  If it isn't working, maybe a modest upgrade - but not a premium upgrade for a C class neighborhood.  

For an A or B class rental I would consider replacing Formica cabinets with wood cabinets.  I would consider replacing a formica countertop with solid surface if I thought it would add value and the existing one was detracting.  Just like when buying a home, kitchens and bathrooms are the most looked at areas for tenants.  

For any house that still has carpet and is going to be a rental, I would probably remove the carpet if it is worn and install either tile or some form of plank flooring if it is a single story house.  For a 2 story, I would leave carpet upstairs.  

It's hard to answer your question not knowing much about the unit... but hopefully what I'm telling you makes sense.  You don't want to over-rehab a unit where it isn't necessary.  Also, probably obviously, you don't want to spend so much money that you aren't making any money after the rehab it.  Only do what is really necessary for it to be able to rent well.

Hope it helps!

Randy