All Forum Posts by: Autumn Whittington

I am under contract on a townhouse that should rent for $1200 - $1300 a month. The kitchen is in fair condition (50 yr old, lower end cabinets, laminate counter tops and low end older appliances). I got a detailed estimate from the store and I know the material cost would be $7,500 for new all plywood, soft close-white shaker cabinets, granite, stainless steel appliances, farm house stainless steel sink with back splash. Everything was chosen to look good, last long, be the lowest cost I could find and hopefully low upkeep maintenance. I would be doing the install, not my first. The cabinets would take 4 weeks to arrive, resulting in one month of lost rent. My property manager told me to only expect about $50 - $75 more a month for this upgrade. I expect 8 - 12 yrs to recover this upgrade cost from rent. I can expect an increase in the sale value of about 7% ($10,000) but I don't plan to sell it for another 15yrs once the mortgage loan is paid off. 

Pros: Likely result in renting the property faster, higher rent of about 4 - 6% and if I sell in 15 years, the look should not be too outdated (I hope).

Cons: I lose a months rent, upfront cost that I lost to invest now, my time and effort, long return and risk of the project going over budget or take longer than planned.

Should I just clean it up and rent it ASAP or invest my time and money? 

*Asking for a friend, he hit me up about this topic and it is something I don't know much about. 

My friend (who is active duty military) is looking to buy a newly built property (built 2018). The current owners recently retired and want to move out of state and are looking to transfer the mortgage vice selling the property. The sellers have only owned it for 1 year and are not looking to make a profit. My friend's idea is that on the positive side, the buyer and seller would avoid closing costs and realtor fees. However if there any red flags or things come up, he does not know what he should look out for? Seems too good to be true in his opinion. What advice should he have? I has orders to that area (Camp Lejeune NC area) and moves in May. He has his VA Loan in full if he wants to use it. He can only afford to put down 3.5% as a down payment if needed.