Remodel On A Rental Property

DSC03956I am in the middle of a somewhat major remodel on a rental property.  It will require a few thousand dollars to get it back in shape.  The renter was not too bad, and they lived there for over six years.  They had good income, always paid on time, and left with proper notice.  Unfortunately, they were big-time slobs.

Although I was not able to show the unit while they were in there, as it was a bit messy, I was able to rent it for June 1st.  I rented it at a price $100 more to tenants without a pet, than the previous tenants rent that included a $25 pet fee.

Here is what I am doing to the property to turn it and prepare for future rentals.

These tenants were some of the first tenants that I brought into the building.  The other apartments in the building saw several other sets of tenants come and go.

DSC03965Paint and Clean.  After six years, the tenants gave notice and moved out of my place and moved into a rented home.  They did not clean anything.  They painted a bedroom purple, the bathroom a darker red/purple with sponge prints.  They also did the sponge prints in the kitchen.  None of this painting was asked permission for, or authorized (or paid) for by me.  It slows the turnover process quite a bit as I have to use two coats of paint to cover up the darker colors.  The new paint will be semi-gloss, including the ceilings.  The cost of this improvement will be ~$500.

There are also some improvements that I am making for future turnovers more streamlined.

Replacing the carpet in the bedrooms.  The carpet is old, and ready to be replaced.  The cost of this improvement will be ~$850.

A strip of carpet was installed outside the bedrooms in the hallway.  All my other units have a laminate floor in this hallway.  Changing this carpet to a laminate will make for less caret wear and tear in this high-traffic area.  The downside is that the hallways will not match the existing laminate in the dining room, living room or kitchen.  So I will tear out the laminate and replace it.  The cost of this improvement will be ~$1,200

Replacing the bathroom fan.  The old fan was burned out; I discovered this while doing my initial check of the unit.  The new fan will have a light.  The only light in the bathroom is above the vanity.  There is a kitchen cabinet over the toilet, and that blocks light going into the shower.  A new lighted bath fan will make the shower brighter.  The cost of this improvement will be ~$30.

Put vinyl under the vanity and kitchen sink.  This is a simple no-brainer.  It’s a cheap and easy way to save the base cabinet and vanity from water leaks.  The cost is minimal, the work is simple and fast.  The cost of this improvement will be ~$15.

DSC03961Replace deck liner.  The current deck has a Masonite covering on the inside.  Where many decks have rails, these decks have a solid wall.  It is Masonite and the Masonite is becoming dilapidated.  A Hardiboard replacement will last forever.  The cost of this improvement will be ~$50.

Replace the Screens.  All the screens are torn of have holes.  They will be replaced.  Luckily, the frames are solid and not bent.  The cost of this improvement will be ~$20.

Replace mini-blinds.  The cost of this improvement will be ~$75.

Change a vent-less washer/dryer combination unit to a stackable separate washer and dryer.  No one likes the vent-less dryers.  The cost of this improvement will be ~$1,500.  Luckily I have a spare washer and dryer set, so my expenses are less.

Remove the garbage disposer.  This is really a problem waiting to happen.  Never install a garbage disposer in a rental.

All the above prices include a lot of labor, from me.  Well over 100 hours.

 

What have you been doing that is keeping you busy?

 

 

 

 

 

 

 

28 Replies to “Remodel On A Rental Property”

  1. Quite a bit of upgrades/repairs, but the place probably looks and feels 100% than 100 hrs ago. Job well done we assume.

    Still working on the financing of the next properties (will be buying 4 unit in one property, 3 to rent our, one for ourselves). Will get really busy hopefully in July (have taken some time off).

  2. Some great ideas.

    With someone who has been there 6 years, are you charging the damage deposit for the painting? Are there any other repairs on the list that you consider damage vs normal wear and tear?

    Also I know you do lot of the work yourself, in a case like this, would you outsource anything to speed up the turn?

    Once again, I always appreciate your rental incites.

    1. I am charging for the painting of the rooms they painted colors that I need to do two coats. If I did not have to change colors, I would not be charging.

      I could outsource the work, but the extra cost would be more than a month of vacancy. I need at least a month either way. Since I have a renter lined up for a two months vacancy, it’s should not be too hard to get it all done myself. I fine that often, people you hire do not take the time to do it right, and it costs even more the next time around. I try to set myself up for easy turns.

      1. Great realistic breakdown on what goes on when a long-term tenant moves out. Friends often ask why I do so much of the work myself. And you sure hit the nail on the head regarding hiring people to do a job and they don’t do it right.

        Thanks!

        George Lambert
        Author, What You Must Know BEFORE Becoming a Greedy Landlord. How to build a portfolio of investment properties for an income that lasts a lifetime.

  3. That’s a lot of work, but it looks like you’re making great strides. Laminate sounds like a great idea in your rentals, instead of carpet. Floor coverings are one thing that has always troubled me in rentals. In florida, tile is common but can be easily chipped. Carpet can be easily damaged as well, and isn’t something I can repair myself. That really leaves laminate. Thanks for the ideas and ballpark costs. We’ll be in the rental game soon

    I hope you have a great weekend
    -Bryan

    1. Thank you for reading!

      This tenant turn is a lot of work, most of mine are trivial. Some of the work is just upgrading, some of the work is replacing what is damaged. Hopefully, in the long run, it will all be worth it.

  4. Disagree with the no garbage disposal. It’s a bit like not having a car with power windows these days. Invest in a good one and it’ll last. Include directions on the reset button for it.
    If a careless tenant (or a child) puts food down drain, prevents clogs in the future and better all around for pipes.

    $500 for paint for 3 rooms? Yikes!

    Do you replace screens yourself? $20 sounds like a GREAT price!

    1. Thank you for reading!

      Most organic garbage should not be put into the garbage disposal, it should be put in the trash. Brillo pads, aquarium gravel, etc. ruins them. There are far too many things that go wrong. I have never had a complaint.

      I do replace the screens myself. If I bring them to a shop, it would be $25 each, or more. I even make the frames if they are needed.

      $500 for paint for a complete paint. Three bedrooms, ceilings, bathroom, kitchen, LR, DR. If I hired it out it would likely be $1500+.

  5. That’s great that you already found a new tenant for June 1. This gives you about 7 weeks to split the 100 hours of labor over. I really like that you have all of these repairs planned out. Were they all self identified or did the future tenant have requests? How were you able to get a new tenant to commit 2 months in advance?

    1. Thank you for reading!

      I was actually showing an apartment in the same building. I ‘sold’ it to two different groups that passed my screening. I decided to move the one group into the newly remodeled one. I did of course ask them if they preferred a lower unit, which they did.

      The repairs/enhancements will bring this more in line with my other units. I needed to paint and put in new carpet. Getting rid of the carpet in the hallway was a no-brainer. Once I decided to do that, the LR/DR flooring needed to be replaced too, or it would look ‘chopped up’. If I am tearing out all the flooring, I can spray the paint in the ceilings, doors and trim – which saves time. The previous tenants did not identify anything.

      Based on the condition of the microwave/hood fan, I am replacing that too. Some things cannot be cleaned as cheap as buying a new one.

  6. Interesting read. I have to disagree with the garbage disposal. In units out here in CA that is a standard. Having said that, too many people, renters and non-renters alike think anything and everything is fair game for the disposal. I keep the disposal wrench handy. More than once its freed up a clogged disposal by just giving it a few turns back and forth from the bottom where it goes.
    I just sold what I call my bread and butter rental this past December. I’ve now reached FI and don’t have to be a landlord anymore. Still, I like reading your posts and understand the hard work that goes into being a landlord.

  7. Wow lots of work, but it will be much nicer when it is done. Were you able to get an increased rent considering you showed it before the improvements?

    What are you taking out of the security deposit for the rooms painted weird colors? It’s not just paint but your labor as well.

    1. Thank you for reading!

      It will be rented for $100 more than the previous tenants. The new tenants do not have a pet, so it’s more like $125. While you can deduct for labor, you also have to claim the labor cost as income, if you do it yourself. I can definitely charge for the first coat of paint on the walls. The normal paint between tenants would only be a single coat. I am charging ~$125 per room for the first coat.

  8. Oh, man. Painting is one thing I always outsource because I suck at it and the pros can do it sooo much more efficiently than I can. Then again, I don’t have a paint sprayer. (Jealous!)

    It’s funny how every landlord has their own ideas of what to include or not include. I’m curious about the range hood/microwave combo. Do you provide those in all of your units? In the fourplex I just bought, one of the units had a built-in microwave, and the rest did not. The one microwave that was there was nice looking, and just a few years old, but broken already (bad circuit board, is my rough diagnosis). I considered replacing the micro with a new one, but since it’s hard to find reasonably priced ones that last a long time, I opted to just replace it with a new hood. One less thing to fix.

    Are you finding range hood/microwave combos that are cheap and reliable over the long term? Are your tenants breaking them? Do you feel like that upgrade brings in more rent and/or better tenants? Thanks! 🙂

    1. Thank you for reading!

      Painting is an acquired taste… Spraying the ceilings and woodwork saves a lot of time, especially since I replacing all the flooring. I also paint with a sheepskin roller out of a 5-gallon pail with a paint screen. I cut in with a 3″ thick Purdy brush.

      The microwave hood thing is only in one of my buildings. Most just have a hood fan. The combo typically costs ~$200, and usually less. Not many real issues with them, but I have had to replace them too.

      I do not think it makes much difference in marketing, although it has more appeal than a garbage disposer.

  9. I live in Germany and own several rental properties (condos) and while I don’t have the issue of painting and cleaning (tenants normally do that) there is still a ton of hassle being a landlord. We’ve having problems with one of units regarding a stupid doorbell. 8 months later still trying to get this resolved

    I recently inspected one of our units and it’s looking pretty dowdy. It’s going to require a fair amount work when the tenants move out to bring it up to our standards. The bathroom in particular is 1960s and really needs to be redone.

    The good news about being a landlord is were considering moving back into one of our units and if I plan it carefully I can renovate the whole thing deduct it from our taxes (big savings in high tax Germany) and move in.

    In spite of the hassles I’ve never regretted buying real estate.

    1. Thank you for reading!

      Being a landlord is work, no doubt. It also takes a huge investment. Far too many propel think it’s a gravy train. Tenants get upset when you decline them because their credit score is too low, yet they are the ones that make it hard for landlords and can look to the mirror for the decline of affordable housing.

  10. Great Post Eric! Im also looking at how i can remodel one of the apartments i own but im doing it in order to make it feel more homey. The last few tenants ive had have left pretty quickly (I see you dont have that problem). Ive been looking at some tips from various articles on how to remodel a an apartment but yours is the one that has had the most insight into pricing. Here is an article you might find interesting about remodeling a rental, maybe you could use some of the tips for your next remodeling project! https://www.rentecdirect.com/blog/2016/03/rental-property-upgrades/

  11. Agree 100% about the garbage disposals! Get rid of them for sure. We have an 8 unit complex and they are gone from 6 of them….2 long term tenants, but when they leave – they are gone too.

  12. I’m doing a complete redone on a house that I’ve bid on for $55K, final price $57K. Estimate fixing $15-$25K. Unlike you, I don’t put in sweat equity, I’m hiring people to do the job. You work so hard, even during retirement!

    Cheers!

    1. Thank you for reading!

      I just got back home from a couple of hours of work, after my real job. If I put in 2 hours every day, it’s like another weekend day. I also use my vacation, (and sick days) to work on rentals.

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