Rental Rehabs (Part 1) - How Nice Is Too Nice? | Ep. #38

12/10/19 • 15 min

... and Landlord! Rental Real Estate Investing Podcast

Rehabbing distressed properties into rentals is a balancing act... You must watch your budget, because every dollar spent on the rehab lowers your ROI - and depending on how you choose to fund your rehabs, it can also lower your cash-flow (at least initially). And you want the resulting property to be nice, plus you also want everything to be durable - so that you're not likely having to replace everything all over again at each tenant turn.

Finding that right balance between price / cost, appearance and durability is critical to a successful outcome. And if you're like me, you want prospective tenants to think "WOW" (or even say it out-loud) - when they first see pictures or have a tour of your rental properties.

In this episode of the [... and Landlord!] Rental Real Estate Investing Podcast, I relate some of my thoughts on achieving this outcome and balance - so I ask the question "How Nice Is Too Nice?"

Here I relate that I cannot prove it, but anecdotally, I feel that the quality of my rental rehabs both make my properties more desirable (I definitely get that "WOW" effect); and results in an increased durability. But it does come at the price of an increased rehab cost. I put a bit extra into making my properties really nice (but "How Nice Is Too Nice?") - so at the same time, I must be careful not to take it too far.

Because at a certain point, things are durable enough and look good enough - so to go further or spend more gains little to nothing in return from increased rent or reduced vacancy. While I feel you can certainly attract a better tenant who may stay longer if you put a little extra into the rehab (like upgrading to Stainless Steel Appliances, LVP Flooring, Granite Counters, etc...) - creating a home they really love and have pride of residency... It has a limit beyond which you get drastically diminishing returns. And since measuring those returns are almost purely anecdotal anyway - you really must be careful when increasing rehab expenses to make a property nice. You can quickly end up with a property that is far nicer than it needs to be to get the same tenant at the same rent you'd have gotten anyway with a lower cost rehab to rental.

So where to draw the line? How nice is too nice?

In this episode of the [... and Landlord!] Rental Real Estate Investing Podcast, I relate some of my thoughts on achieving this outcome and balance - so I ask the question "How Nice Is Too Nice?"

So where to draw the line? How nice is too nice?

Previous Episode

Be All That You Can Be... and RICH! | Ep. #37

Might there be a "Super" version of yourself inside - just waiting to get out? Or stated another way... Are you currently the best possible version of yourself? Might there be another possible version of YOU - who is capable of doing things that could make you RICH. Or do you think it more likely that you'll somehow develop super powers and fly before you'll ever become RICH?

The book Rich Dad Poor Dad puts forth the idea that being RICH is a choice. But the opposite is true as well... Being POOR is also a choice. Or actually, a life long series of daily choices - bad ones. But YOU CAN BE RICH. You just have to WANT IT. You have to WANT IT enough to DO SOMETHING to obtain it. And most people won't. In fact, they CHOOSE not to.

In this episode of the [... and Landlord!] Rental Real Estate Investing Podcast - I talk about how most people are not RICH because it has never occurred to them that they can be. And thus they make choices that ensure they won't be. At the basic level, all it takes to be rich is 4 things... 1) The belief that you can be; 2) The determination that you will be; 3) An idea as to how; 4) And effective execution of that idea.

The problem is that (outside of maybe winning the lottery) most people don't think that they can be rich. So they certainly don't have any determination to be rich. And most people are lacking ideas, such as for a business, product, service, etc... So they can't execution on what they don't have.

Ideas are infinite - but why would an idea come to you if you're just going to dismiss it as something you can't do anyway? So the first part of getting an idea to execute upon is believing that you can and then determining that you will.

So listen to this episode of the Landlord Podcast and let's stop being lessor versions of ourselves. We all have greatness within - LET IT OUT!

Next Episode

Rental Rehabs (Part 2) - Tenant Proofing | Ep. #39

The cover image for this episode shows your rental property flooded and infested with water fowl. So maybe you can't Tenant Proof against flood and fowl - but this exaggerated scenario (and birds) aside... You can certainly do somethings upfront (during the rehab) to protect your rental property against the more typical hazards - including pets (but hopefully not penguins).

So in this episode of the [... and Landlord!] Rental Real Estate Investing Podcast - I'm going over some of the things that I've done during my Rental Rehabs to Tenant Proof my properties. You can save yourself from headaches and keep money in your pocket by avoiding certain issues from the start.

Floors, Faucets and Fixtures - These are where I focus my Tenant Proofing efforts. These don't cover everything, but they go a long way towards your headache and hassle free Landlord life. They form the foundation - and built upon these, you must start with proper Tenant Screening, proceed with effective Tenant On-boarding, and continue with on-going Property Inspections.

So checkout this Episode #39 of the [... and Landlord!] Podcast to hear my insight into how I Tenant Proof Blue Chariot Properties.