Most of the properties I have bought in my investing career have been distressed. That means that they needed work. I am not afraid of a major rehab. In fact, I find that properties in need of a major rehab often make the best deals.
Of course as an investor I want to maximize my return on the properties I buy, but I also realize that I intend to hold these properties for the long term. So I have learned over the years that you can save your self some money, time and hassle by spending a bit more money on the front end.
Here is what I mean.
Kitchen and bathrooms often sell a place to a potential renter. If these two rooms look good, not only can you generally get a bit more in rent, you will also generally get a better tenant and the property will rent faster when it comes on the market.
So, instead of linoleum on the kitchen floor, invest in square foot ceramic tiles. Tile is almost as inexpensive as to install as linoleum but it will look so much better and last so much longer. Linoleum flooring simply gets grimy looking and it is guaranteed to be ripped or torn by your tenants when they are moving in or out. Why install a floor that you will have to replace every two years or so? Go with tile.
Same goes for the bathroom. Install tile on the floors and shower walls. Use those same square foot ceramic tiles you put in the kitchen. They look nice, are easier to clean and simply more durable. They will resist the water much better than that cheap plastic stuff, and even better, they resist the mold too.
So be a smarter landlord and invest a little bit more on your rehab upfront with the kitchens and baths. Both you and your tenants will be glad you did.
