You want to maximize your income from your Silicon Valley rentals? Does your rental need repairs? Are you wondering what repairs would bring you the best Return on Investment?
Deciding on what to remodel for a rental property is a bit tricky compared to a remodel for a flip. After all, you will not have to deal with the maintenance and service calls for any appliances or fixture you are installing on a flip. That’s why selection of the brands and material becomes critical.
Here are some basic guidelines and recommendations for repairs that you could consider to increase your rental income:
Kitchen & Bath: The biggest need for upgrades of Silicon Valley rentals that we have seen are in Kitchen and Bathroom. These are the safest upgrades since the ROI on these investments are more than 100%. For a small kitchen remodel you should budget $800-2,000 to counter tops and 2,000-5,000 for appliances. You can also allocate $3,500 for each small bathroom remodels.
New Roof: Does the home need major roof repair!? Allocate $6,000 for Small (Single) Roof and $9,000 for Full Roof. If you have to remove multiple layers of shingles installed, you need to add $2k for labor and dump costs. Adding new insulation should also save you on your heating and cooling costs.
Windows: If the project calls for Windows to be replaced, it would be safe to allocate $300 for each window. We strongly recommend Anderson Windows is a wonderful alternative to Vinyl Windows if you have a fixer upper flip in a high end neighborhood. If you will need larger French or Sliding Doors allocate $800 per door.
Landscaping: Allocate $1500-2,000 for front and back yard landscaping of your Rental Property but schedule it after all the remodeling work has been completed.
Electrical/Lighting: Adding recessed lights gives a home a much more modern feel and is not that expensive with each can costing less than $10 depending on the style and trim you choose. If you have to change the panel, then allocate another $1,000 for the panel.
Flooring: Every major fixer upper will require flooring which is not that expensive these days. Allocate $2-$5 dollar for each sqft of flooring that you have to repair. This estimate include both labor and material. Some of the pre-finished Engineered wood floors are wonderful and can save tons of time and money from staining the raw wood multiple times.
Keep in that the longer your remodel take, you are losing more money since it’s preventing you from generating rental income. That’s why you might be able to schedule some of these repairs when the home is occupied.
We develop an After Repair Value model for our clients before the start any remodeling efforts. With the material identified, we can then determine which of these remodeling projects can be postponed to after the property has been occupied by tenants.