How to Rehab Rental Properties
It’s been a couple of weeks since I first introduced the 4 bedroom brick investment property we purchased as a long-term rental. My goal for this post is to show you how to rehab rental properties, or at least show you the level of finishings we aim for when rehabbing a rental property. I will go over specifics of how to actually do the work in future posts, so please stop by frequently or sign up for our newsletter to the right of this post.
We’ve all seen the many HGTV shows explaining how to flip a property and sell it for loads of cash. These tactics work well for investors looking to flip, but not as well for a buy and hold investor. Rehabbing to that extent may end up leaving you with no cash flow. We tend to do things a little different for rental properties and spend a lot less while still ending up with a great product for our future tenants.
Here’s where we left off and what still needed to be finished.
- Pressure wash/prep exterior wood for paint – Done
- Paint exterior wood – Done
- Resurface kitchen countertops using Daich Spreadstone – Done, and it was incredibly easy!
- Install bathroom vanity – Done
- Install trim in the living room – Done
- Touch up any paint throughout the house – Done
- Install mailbox – Done
- Post property for rent! – Done
We finished everything on our check list and are now able to list the property for rent. Read on to see how the house turned out.
An all brick building is excellent for rental properties as it requires less maintenance. If this was a flip, we might have considered painting the brick a light gray tone for maximum curb appeal. Since this is a long-term rental, I don’t want the extra maintenance involved with re-painting in a few years. Although it is not as dramatic as the interior, the replacement windows and handrail painting do help clean the place up. These are the items we updated on the exterior:
- Replaced all of the windows
- Painted the deck and handicap ramp white
- Enclosed the ceiling of the patio and replaced the trim on the porch floor
- Replaced the porch ceiling fan
- Hauled off left over trash, trimmed the bushes, and mowed the yard.
My initial thoughts were to install a floating vinyl plank or water resistant laminate flooring as these types of installs are fast, easy, and will hold up well. The hardwood floors were heavily stained, and I was concerned about being able to sand far enough down.
In the end we rented a floor sander for around $50/day and took 2 days sanding the floors down. We chose a darker stain and coated them with 4 coats of polyurethane which will help protect the floors for years to come. Here’s everything we updated in the living room.
- Sanded, stained and polyurethane the floors. We used Minwax Super Fast drying Polyurethane with a satin finish. Some of the reviews on amazon were sketchy, but for us it turned out great.
- Primed and painted the walls and ceiling.
- Replaced the old aluminum picture windows
- Installed new quarter round trim
- Replaced all of the electrical outlets, switches, and covers
Who doesn’t want an updated kitchen? The kitchen is one area you can go crazy spending a lot of money on, and if you’re attempting to flip a property in a high-end neighborhood, this is probably where you want to go all out. When investing in long-term rental properties, we want it to look updated and hold up well overtime but we don’t need to replace everything. The cabinets were in excellent shape and there were quite a few of them so this saved us a lot of money. We also saved a good amount of money on the countertops by resurfacing them instead of replacing. Resurfacing kits have come a long ways and are definitely worth $150-200 to make the old laminates look new. Kitchen updates:
- Replaced windows – We used Window World (sorry no affiliate link, but we do highly recommend them). They came in at half the cost of Home Depot and this is our 3rd property we’ve used them on.
- Prime/Painted walls
- Installed vinyl flooring
- Resurfaced the countertops
- Replaced electrical panel – I recommend hiring a certified electrician for this level of electrical work as it will reduce your liability.
- Replaced all electrical outlets and covers
- Swapped out the old yellow track lighting
- Purchased new appliances
Bathroom and Laundry Room
The Bathroom had been recently updated already and the laundry room did need a lot of work, but it’s a small area so these rooms were knocked out pretty fast. If time allowed, we had planned on moving the hot water heater into a nearby closet and adding another bathroom to the laundry room. We probably should have done this, but the project was already passing our budget and frankly we were ready to close out the project.
- Prime/Paint both rooms
- Bathroom – Replaced the vanity
- Laundry Room – Pulled down paneling and skim coated the old sheet rock
Bedrooms and Bonus Room
Bedrooms take up the majority of the square footage in this house and they all needed a good amount of work. Since most of the panelling had never been painted, we had to lightly sand them down before priming. There was also a light pet odor from where a previous owner had pets. To solve this problem and save time, we ended up purchasing a Graco x7 Airless paint sprayer and pumped out 15-20 gallons of kilz stain blocking primer, completely encasing the ceiling, walls, and trim. This killed the odors and gave us a good base to start with. If you go this route, make sure it’s the very first thing you do in the house and turn the HVAC off so paint isn’t carried throughout the rest of the house.
We also installed carpet in the bedrooms and bonus room. Many investors will tell you to never use carpet, but we think it’s okay as long as you don’t use carpet in the high traffic or common areas and go with a darker color to hide stains. We also require tenants to have the carpets professionally cleaned upon move out. For tenants with pets, we do charge a $50/month non-refundable pet fee and an additional $200-300 refundable deposit. This helps off set the increased risk of damage from pets. Here’s what was updated:
- Replaced windows
- Sanded walls and trim using a standard pole sander
- Primed and painted the walls
- Replaced electrical outlets
- Swapped out lights in a few of the rooms
- Installed a light brown carpet which hides stains well
Any real estate investors doing something similar? how do your rehab finishing differ from ours? Please comment below as I’m always looking for suggestions and ways to improve.