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How much would you change?
Hello, D&R! I pop on here every so often, and I'm hoping you can give me some advice.
Here's a little background. My husband and I want to move into a bigger house within a year or two and will rent out our current one when the time comes (riding out the crappy market--perhaps until we die). We need more space for the kids. I'm not sure how long it will take us to find the perfect house, and it needs to be ideal since we'll be tied down to two mortgages. We're getting a new roof in the next few weeks, and we'll probably be repaving the driveway very soon after. We believe these things really need to be done before we become "landlords" to make the house safe and to save us from having to deal with issues down the road. A year ago we planned to not put another penny into this house and focus on saving a down payment for the next one, but these repairs are obviously taking a big chunk from that savings.
Here's the thing. Our kitchen has been in need of an update since we moved in six+ years ago (vinyl flooring with a couple of holes, decent but weathered cherry cabinets, beige laminate counters, a mix of black and stainless appliances), and we're considering fixing that up too in a neutral, durable, reasonably affordable way. At the very least we want to replace the floors (grey porcelain tile?) and paint the walls (grey as well?), but we're also thinking of replacing the black appliances with SS, painting the cabinets white-ish, and upgrading the counters. Doing so would help me like living here for a bit longer and would allow us to ask a little more for rent. Sadly, doing so would also take us back to square one on the down payment saving. After the roof and driveway, we won't be in great shape in that effort anyway.
Three questions:
Do you think we should update the kitchen?
If so, what do you think of my choices? Any recs for countertop material?
Do you have any other advice for us would-be landlords?
I'd appreciate any help you can offer!
Re: How much would you change?
If this home is going to be a rental and will get kind of beat-up like rentals tend to do (owners take better care of property than renters, typically), then the only changes I would make would be to the flooring and the wall color to be more neutral.
You shouldn't lose your savings fixing up cosmetics for a home that you are going to rent out. IMO. Your focus on the roof and driveway are legitimate since you definitely don't want either to go into disrepair and have moisture problems, which would cost more down the road.
Save the moola.
A lot of renters are hard on houses/apartments, its not theirs so less care is involved.
Paint, something light and neutral. Replace the flooring with something cheap and neutral, probably another laminate. Stain the cabinets and use the rustoleum kit on the counters. This will update them both for very little cost (compared to replacing). If the appliances work, leave them. If they don't work replace them with a cheap alternative. Do you really want to shell out thousands and thousands of dollars for SS appliances for a rental that might get beat up? Renters are looking for a place that suits their needs, not SS appliances.
It might not hurt to have a home inspector come out to make sure that there aren't any safety issues that you aren't seeing before you rent it out.
This. Don't waste your money.
Being a landlord sucks. A lot. It is a huge investment of time and money that most people are not prepared for. I would sell a home at a small loss any day if it meant I never had to loose sleep over paying a second mortgage or maintaining two homes. I could tell your tale after tale of horror stories about tenants as multiple family members on both sides of my family are landlords. Is there anyway you can add an addition onto your existing home and make minor changes/upgrades as you can? When you think of all the money you'll be sinking into a new home (realtor fees, downpayment, inspection fees, cost of furnishing with things you can't bring from your old house like window treatments and furniture that doesn't fit, etc.) it might be cheaper or about a wash.
I think it's worth *some* investment in making the place look nice, but not much. We currently rent a condo that the owners can't sell and decided to turn into a rental two years ago. It's one of the more updated rentals out there - we have granite counters, original cabinets that the owner painted white, but black appliances. We also have very sturdy laminate floors that have held up to everything we've thrown at them.
If you're going to replace appliances, you might want to look for something refurb at Sears outlet or some other lower cost alternative.
Our landlords have just done their third round of getting the apartment rented to the people who are taking over our lease. They've always gotten it rented right away and they've gotten to be picky about who they've rented to.
I guess my thought is, if you have a more upscale rental available you're going to attract a certain type of tenant that might take better care of it than if you had something not as nice.
Having a steady stream of renters (or ideally one good happy one) and being able to ask enough for rent to cover the mortgage are the main reasons I'm leaning toward the update. I know neither of those is a guarantee, though.
I do get what the rest of you are saying. Crummy tenants, needing to save money ourselves, the stress of renting--all of that keeps my head spinning. There is part of me that wants to move sooner than later and doesn't want to prolong our stay here by dipping into that down payment. The other part wants to make this house the best it can be to put off moving.
For now I think we will 1) have the house inspected (good advice) 2) paint and do the floor 3) keep thinking about fixing up the counters/cabinets/appliances before we sink any more $ into this house.
The good thing is I do like this house. We've refinished the original hardwood floors, finished the basement, turned the 2nd and 3rd bedrooms into a playroom and a nursery--these things make you love a house even if it's getting too small.
Keep the advice coming though if you have it. I'm certainly not done thinking on this!
Not to burst your bubble, but we HATE being landlords. So much so that we're saving up $40K just to get rid of the old house this summer! It's a bigger problem for us b/c the house is on the other side of the country (where we lived 4 years ago). We kept waiting for the market to get better (it has continued to go down), but after spending $9K on a house we don't even live in (just THIS YEAR) and having tenants that complain about every minor thing and us being overjoyed when they are only 10 days late on the rent, we just can't take it anymore! It's not just them either...we've had 4 years of terrible tenants and the house is in bad shape after the first tenants lied about having "small dogs" (two badly behaved boxers).
That said, I wouldn't do any upgrading at all b/c good tenants are rare (although that probably depends on your location). Also, I'd hold off on the big repairs. If you wait until you are a landlord then at least you can deduct those repairs on taxes.