10 Inexpensive Ways To Spruce Up Your Rental Or Rehab Property

Written by Jordan on . Posted in Blog

By: Bill Bronchick

It’s easy to fix up your properties if you have unlimited cash. However, you need to keep your repairs to a Related Information: “Flipping Properties Course” minimum to stay profitable. You also need to keep your properties in good shape to attract tenants or buyers. There are the basic improvements, such as carpet and paint, but these can still costs thousands of dollars. The following are some inexpensive ways to improve your properties with very little cash.

#1) New Electrical Switch Plates

This is such a minor, yet overlooked improvement. Most rental owners and rehabbers paint a unit and leave the old, ugly switch plates. Even worse, some even paint over them.

New switch plates cost about 50 cents each. You can replace the entire house with new switch plates for about $20. For the foyer, living room and other obvious areas, spring for nice brass plates. They run about $5 each – not much for added class.

#2) New or Improved Doors

Another overlooked, yet cheap replacement item is doors. If you have ugly brown doors, replace them with nice white doors (you can paint them, but unless you have a spray gun it will take you three coats by hand).

The basic hollow-core door is about $20. It comes pre-primed and pre-hung. For about $10 more, you can buy stylish six-panel doors. If you are doing a rehab, the extra $10 per door is well worth-it. For rentals, consider at least changing the downstairs doors.

#3) New Door Handles

In addition to changing doors, consider changing the handles. An old door handle (especially with crusted paint on it) looks drab. For about $10, you can replace them with new brass finished handles. Replace the guest bathroom and bedroom door handles with the fancy “S” handles (about $20 each).

#4) Paint/Replace Trim

If the entire interior of the house does not need a paint job, consider painting the trim. New, modern custom homes typically come with beige or off-white walls and bright-white trim. Use a semi-gloss bright white on all the trim in your houses.

If the floor trim is worn, cracked or just plain ugly, replace it! Home Depot carries a new foam trim that is pre-painted in several finishes and costs less than 50 cents per linear foot. Create a great first impression by adding crown molding in the entry way and living room.

#5) New Front Door

You only get one chance to make a first impression. A cheap front door makes a house look cheap. An old front door makes a house look old. If you have nice heavy door, paint it a bold color using a high-gloss paint. If your front door is old, consider replacing it with a new, stylish door. For about $125, you can buy a very nice door.

#6) Tile Foyer Entry

After the front door, your next first impression is the foyer area. Most rental property foyers are graced with linoleum floors. Consider a nice 12″ Mexican tile. An 8′ x 8′ area should cost about $100 in materials.

#7) New Shower Curtains

It amazes me that many landlords and sellers show properties with either no shower curtain or any ugly old shower curtain in the bathroom. Don’t be cheap – drop $40 and buy a nice new rod and fancy curtain.

#8) Paint Kitchen Cabinets

Replacing kitchen cabinets is expensive, but painting them is cheap. If you have old 1970′s style wooden cabinets in a lovely dark brown shade, paint them. Use a semi-gloss white and finish them with colorful plastic knobs. No need to paint the inside of them (unless you own a spray gun), since you are only trying to make an impression.

Americans spend 99% of their time in the kitchen (when they are not watching TV). A fancy modern faucet looks great in the kitchen. They can run as much as $150, but not to worry – most retailers (Home Depot, Home Base, etc) often run clearance sales on overstocked and discontinued models. I have found nice Delta and Price Pfister faucets for about $60 on sale.

#9) Add Window Shutters

If you have ugly aluminum framed windows, consider adding wooden shutters outside. They come pre-primed at most hardware retailers and are easy to install. Paint them an offset color from the outside of the house – (e.g., if the house is dark, paint the shutters white. If the house is light, paint them green, blue, etc.).

#10) Add a Nice Mailbox

Everyone on the block has the same black mailbox. Stand out. Be bold. For about $35 you can buy a nice colorful mailbox. For about $60 more, you can buy a nice wooden post for it. People notice these things….and they like them!

Bill Bronchick

William Bronchick, CEO of Legalwiz Publications, is a Nationally-known attorney, author, entrepreneur and speaker. Mr. Bronchick has been practicing law and real estate since 1990, having been involved in over 600 transactions. He has appeared as a guest on numerous radio and television talk shows including CNBC Power Lunch. He has been featured in Who’s Who in American Business, Money Magazine, the Los Angeles Times and the Denver Business Journal. William Bronchick has served as President of the Colorado Association of Real Estate Investors since 1996.

Don’t Make Long-Term Decisions Based on Short-Term Problems

Written by Jordan on . Posted in Blog

By: Chris Miller

I have seen countless investors, countries, and even major corporations make permanent, long-term decisions based on short term problems.  My investors are well aware that real estate works best when it is held for five to ten years, or perhaps longer.  Such an investment needs to be made based on long-term trends; not “fads.”

Mistake One  – Cutting Necessary Costs to Save Money

An excellent example is a company that, in an effort to cut costs, fires a majority of its’ salespeople.  Less salespeople equals less sales, and severe financial hardship follows.  This may seem like an extreme example, but I’ve seen it happen twice!

In real estate terms, we can make this mistake by; skimping on maintenance – using lower quality replacement appliances that just break sooner, or on management.  (Hiring a cheaper property manager, and seeing vacancies increase by 5%.)  We can avoid these mistakes by looking at the “big picture;”  How can spending a little bit less today affect me in the future?  Keeping costs low is an essential part of successful real estate management; but it needs to be done wisely.

Mistake Two – Let’s completely change the direction of our business in response to this short-term market condition.

It would be impossible to discuss missteps made by the “Big Three” American motor companies in less than 100 pages, so I will just pick one example from General Motors; the liquidation of their Hummer brand earlier this year.  I personally did not like those cars, but GM created a powerful and valuable brand name with those big ugly trucks.  Hummer was profitable, but higher gas prices slowed demand, then the economy brought sales to an abrupt halt.  (Along with the sales of every other auto manufacturer.)  GM had a corporate meeting and decided, “Big cars aren’t selling – so, rather than designing smaller vehicles to sell along with the big Hummers, let’s just throw this company and brand into the trash.” This way, GM can focus on their other brands; or decide which of them will join Oldsmobile, Pontiac, Saturn and Geo in the automotive graveyard.

GM has the idea that “people will never buy big, gas guzzling cars again.”  A look at history tells us they are probably wrong.  After the oil crisis’ of the ‘70’s, (the last time that people were “not going to buy huge, gas-guzzling cars anymore”), it only took 15 years for them to regain popularity.  The huge SUV craze seemed to start just after the famous “OJ Simpson Bronco chase” in 1994.  We don’t know if the Hummers of the future will run on electricity, natural gas or gasoline – but they will come back into fashion again.  After all, some people still need big cars.

Similarly, many of my competitors in the tax-advantaged investments arena have revamped their business plans in order to bring in more revenue.  These have abandoned real estate as a primary focus to sell stocks, bonds, and even auto insurance.  This strategy is problematic for two reasons:

First, businesses that are specialized tend to be more successful and produce better products for consumers.  For all their faults, at least the Big Three automakers haven’t fallen into this trap.  Imagine if GM started selling bicycles, lawn furniture, and cement mix!  Fortune 500 companies such as Hewlett Packard, Caterpillar, and Home Depot show that the focus created by specializing in one industry can lead to success.

Second, bringing differing products into the mix takes ones’ focus away from hard assets such as real estate or oil and gas.  As I have mentioned before, these assets require significant expertise to evaluate.  Somebody who represents real estate or energy assets on a “part-time” basis simply cannot evaluate deals as well as one who does it full-time.  My favorite example is the hypothetical CPA who also serves as my gardener.  It may be more convenient, but he probably isn’t the best tax guy or lawn mower out there.  As a result, quality suffers; in my taxes and my yard.

This is why, for investors, it makes sense to find advisors who specialize in different areas; and to use separate advisors for those areas.  A CPA, a stockbroker, a separate municipal bond broker (if you own either of these assets), and somebody for your real estate and tax-advantaged investments.  I have seen many investors overwhelmed by managing their own stock investments.  In some cases, this can lead to “analysis paralysis.”  Recently, I spoke with “John.”  He wanted to move a sizable part of his stock investments into real estate, but wanted to wait for the “right moment” to sell.  Since he was managing all these stocks himself, he was caught up in the “micro-managing” of individual positions.  As a result, he didn’t sell – and the DOW went from 11,000 down to 10,000 again.  If he had a professional running his stocks, he could have sold what he needed with a phone call and written a check.  His adviser could have made some sell suggestions right away – and may have avoided those losses.

Instead, Make Your Long-Term Decisions Based on Long-Term Trends

In real estate, I prefer to buy in growing metropolitan areas.  An investor who bought property in Southern California during the 1970’s probably saw more appreciation, on average, than one who bought in Detroit.  This wasn’t due to luck; Time magazine published an article lamenting Detroit’s decline in 1961! Detroit is getting some attention from investors today due to “low prices.” I don’t believe that Detroit will grow as fast as Dallas or the Raleigh areas over the next ten years, however.  Focusing on the “big picture” here can help us make better decisions.

Investing, like life, is not a “6 month drag race.”  It is a decades-long marathon.  This doesn’t mean that we need to hold our investments for 30 years; we should choose those purchases based on what we think will happen between now and 2040.  Focusing on these long-term trends can help us reach our long-term goals.

Christopher Miller is a Managing Director with Specialized Wealth Management in Tustin, California and specializes in tax-advantaged investments including 1031 replacement properties.  Chris’ real estate experience includes work in commercial appraisal, in institutional acquisitions for a national real estate syndicator, and as an advisor helping clients through over two hundred 1031 exchanges. Chris has been featured as an expert in several industry publications and on television, and earned an MBA emphasizing Real Estate Finance from the University of Southern California. Call him toll-free at (877) 313 – 1868.

This does not constitute an offer to buy or sell any security. Securities offered through American Beacon Partners, LLC. 3603 N. Hastings Way, Suite 100, Eau Claire, WI 54703, 715-552-2741. Member FINRA/SIPC/MSRB. Specialized Wealth Management and American Beacon Partners are not affiliated.