If you are an investor who is buying rental properties, are a do-it-yourself type or want to renovate your kitchen, there are many things you can do to reduce your costs on doing some updating. Note that most renovations run way over budget and encounter issues, regardless of where DIY, semi-DIY, or having a contractor do the job. Make sure you estimate plenty of contingency funds for those guaranteed cost overruns.
Also, be cautious about spending a lot of money on kitchen renovations. While any property renovation will add value to the property, it's unlikely to add as much value as it costs. For example, if you spend $20,000 on a kitchen, it might only add $12,000 in value. Finally, again be cautious on how much you spend as it probably won't dramatically increase your rental amount, but it probably will increase the length of time that your tenants stay at the property, and smart landlords love long-term tenants.
Some fixer-upper options:
Cabinets – If the cabinets are in good shape, but old and gray, a fresh coat of paint from a skilled painter can add a world of life to the kitchen. But the painter needs to take the cabinets off, sand them lightly, brush paint them with the proper type of brush and paint, and re-install them. And of course sand and paint the cabinet exterior fascias too! A nice job of painting on an average kitchen probably runs $750 – $1,000 if done right. And don't forget to paint the inside and bottoms!
You can also put new hinges onto the cabinet doors if they are the ones that show on the exterior of the cabinet when the door is closed. Word of caution: If the existing holes don't match the new hinges, it can end up being a big headache and probably won't be worthwhile. Brushed nickel hinges are $2-$4/hinge.
And new handles on those cabinets are a must. You can buy the 20/30 packs of brushed nickel handles at the home renovation stores. They're about $2-$3 per handle and look great.
If the cabinets are past their useful life, you can check into cabinet re-facing or cabinet replacing – both are expensive options. If you are going to replace them, make sure to look at the in-stock and "special order" cabinets available at the stores, before you jump into custom-made cabinets. If you are going to re-face or replace, make sure to get several bids for the work.
Countertop – If you are going to keep the cabinets, a new countertop will be a big help. But, if you're not ready to replace the cabinets just yet, wait on the countertop, too. Countertops can run $15-$65 per square foot. I like the giant granite squares that can be found at your home renovation store. They are installed at 18 inches wide and 24 inches deep, so they're much better than the 12 inch by 12 inch standard granite square tiles. Cost of these installed is probably $22-$30 per square foot; granite is $10-$15 per square foot. Note: Use dark grout for rentals! You can also buy brand-new laminate counter tops, which are less expensive and easy to do.
Sink/faucet – If you are replacing the countertop, it's time to do the sink and faucet! Most home repair stores offer a stainless sink and faucet combination for about $200-$300. Make sure you buy the "combo pack."
Flooring – Flooring really should be tile (which isn't cheap) or linoleum – which doesn't last that long. It's essential to use dark grout for tile in rental floors, and a tougher grade of linoleum is best if you go that route. Skip the carpets or wood laminate flooring for any kitchen/bathroom floors.
Appliances – If you need to replace the appliances, go with moderate grade appliances. Most appliances will last a long time. I've bought many properties with 20-year old appliances working fine, but they look terrible and could be energy inefficient, so I replaced them.
Lighting – Kitchen lighting can be easily updated from an extensive selection at the home improvement stores. They're usually easy to install. Check out the ones with low energy bulbs.
Water/Electrical – If the property is older, it's probably a good time to bring in the plumber and electrician. Change out old water valves and update the kitchen switches and electrical outlets to new GFCI circuits for water-related safety.
All the items above cost money whether you DIY the job or semi-DIY it. But an updated kitchen will help in the most important goal in rental property ownership, which is to keep your tenants as long as possible. Just like you, your tenants want to live in a nice place too and a nice kitchen will inspire them to stay a long time!
More on Zillow:
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Rental Property Investing 101
Rental Homes: Making More Money by Keeping Your Tenants Happy
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