My team and I completed a rehabilitation project for one of our rental units this weekend. This project was cosmetic with the exception of the HVAC Unit. We think this is a non-issue (no gas), but we will know later in the week. This is the first post of rental rehab with pictures and costs. If you want to know what we paid for the building in detail, check out Buying Real Estate for Passive Income. With that being said, let’s dive in!
The original tenant was inherited from the previous owner. From what we gather, the tenant had been living there for a number of years and didn’t have any drama. After purchasing the place, we noticed the tenant was late on rent quite often. The first time wasn’t their fault. The Veterans Affairs people messed up the tenants check, sent us a letter admitting fault, and asked for an extension on the tenants’ behalf. We did and all was well.
After that, unfortunately, the tenant could not keep up with the rent payments. We started the eviction process and the rest is history. What we ended up finding out was the previous owner sold the tenant a car. Between the new car note along with the rent payments, the tenant could barely manage them together. I blame the previous owner for this. They knew better than to sell his tenant something they couldn’t afford. But anyway…whatever.
Our plan was pretty simple. Evaluate, estimate, and execute. We had the security deposit of the previous renter of $880 and we wanted to spend no more than $5880 for this rehab. The goal here wasn’t to completely gut the place like we had to do with 4 of our other units because this one was in much better shape. It’s just the unit had not been updated or cleaned properly in a few years other than a newer toilet and mirror.
Our walkthrough wasn’t exhilarating. I think the most interesting part was how dirty the place was. The carpet, windows, doors, ceilings, and rooms were filthy. The tenant had 2 dogs so I’m sure that didn’t help much. The bathroom was clean as well as the kitchen sink.
Overall, it wasn’t bad. The work was more cosmetic and not like we had to fix structure issues like floor joists (uneven floors), plumbing, or electrical. This was a big relief as we were just coming off 2 major rehabs that were complicated on almost every level.
Here are some of the before/after pictures of the unit. You will find details and costs after. I didn’t have pictures for EVERYTHING but, these will give you a good glimpse into what we were able to accomplish.
- Flooring – $494.04
- Light Fixtures (ceiling fans) – $139.94
- Recessed Lights (living room & kitchen) – $460
- Blinds – $356.02
- Paint – $314.84
- Misc – $307.19
- knobs, defusers, etc.
- Counter Tops – $422.66
- Cabinets – $1,364.88
- Outside Staircase Rebuild – (included in labor)
- Labor (for all – even old kitchen removal) – $2835
As you can see from these numbers, we went over budget around $814.57 however, that was my fault. I added recessed lights, new blinds, etc. Overall it wasn’t bad.
Timeline & Renting
The project took a little over a month, but we spent a lot of time waiting on the kitchen to be delivered in parts. We lost about 2 months worth of rent however, we had A LOT of applications from our Cozy.co portal and people contacting us about the rental during the rehab. The unit was rented before it was complete. That’s a good thing!
This rehab went really well and wasn’t as complicated like others we had been a part of. We were on budget (minus my additions) and as you can see from the pictures, there is a noticeable difference in the living space. Next, we will clean up the outside and I will make sure to post that as well.
FYI, BiggerPockets.com has an excellent rehab calculator if anyone is interested. We didn’t use it for this one, but we plan on using it for our next. The rehab was managed by BTDC Properties LLC. Check ’em out!