How Extensive Should Your Rehab Be?

Real Estate Agent with Real Estate II

How Extensive Should Your Rehab Be?


            Let me start this post by saying I have lost more money overdoing rehabs than any of the other mistakes I have made in real estate combined.  However, I believe I have learned my lesson and can share some helpful advice,  


My problem, and a major problem for the vast majority of the investors I work with, is remembering that I am not rehabbing this house for myself or for my family.  I have an obligation to provide a safe and secure residence as an investor and landlord, but this is a business, and I have a right to expect an appropriate return on my investment.  


            Having said that, I believe the basic "bones" of a house need to be in good shape.  Structural components such as the roof have to be sound and secure.  Plumbing, electrical and heating systems have to be in working order.  All windows and doors have to work properly.  These things are the basics that every buyer or tenant expects and deserves.


Upgrade to the Neighborhood Standard


            Unless the neighborhood dictates otherwise, we will save money by painting cabinets and installing new hardware versus installing a new kitchen.  Sometimes individual floor tiles are less expensive than one-piece vinyl flooring or ceramic. 


            We are conscious of the grade of carpet we use and tend to stick to a neutral middle line.  When in doubt about the popularity and resale potential of the color of anything, go with the best seller.  This means, paint, carpet, shingles, vinyl siding, kitchen cabinets.  Ask your vendor - do not deviate. 


            Paint color is important and one color costs the same as the next.  Beiges and taupes are popular right now and depending on the natural light available, these colors can make even a modest home feel rich and contemporary.  Sometimes the darker colors reveal blemishes in plaster or drywall more so than a lighter color.


Things Some Investors Skip - But You Should Not


  • Replace the toilet(s) or at least the seat.  Use the larger units found in new homes.
  • Install air conditioning if it will provide a financial return.  Older people appreciate this.
  • Handicap Accessible - If requested, appropriate, or just an easy thing to do.
  • Dishwashers are appreciated and will return their value if selling but less so if renting.  Again it depends on the neighborhood.
  • Garage door openers are important.
  • Exterior lighting - make sure what is there works.
  • If there is a partial fence, consider completing it and / or installing gates that can be secured if they are missing.  (Gates are almost always missing.)
  • Full-view storm door should be installed at the front door. 
  • Washer and dryer hookups are imperative.
  • Keep the grass mowed and trimmed. - Pull the old bushes out - if you don't it may still look like a foreclosed property.    

•o    New mail box, house numbers 

•o    In our area vinyl replacement windows are a big selling point and we are continually amazed at how many investors skip this step in an effort to save money. Check Lowe's and Home Depot prices against local sources.  We have been getting windows installed for $35.00 each for several years now.

•o    Paint the basement walls and the basement floor, including the stairs leading to the basement.  This goes a long way towards showing the care you took with the rehab.

•o    Clean and touch up paint furnace and water heater.


Some things we tried that didn't attract the buyers we expected:

  • Jacuzzi tubs
  • Flat screen televisions
  • Ceramic tile, where the expectation for that kind of quality was not there in the first place
  • Landscaping beyond a cut-out bed, a small amount of shrubbery and fresh mulch.
  • ‘Wow' items always seem like a great idea - but never seem to make a difference.


Your goal of course it to spend the least amount of money possible and to get the biggest bang for your buck.  Obviously, keeping a property as a rental vs. preparing it for sale will impact your decision making processes.  Again, and I cannot stress this enough, this is a business, you are not rehabbing an investment property as your personal residence.  Stay within the neighborhood standard and make the numbers work you.


If you have questions or comments, email me at


Comments (1)

Thomas McCombs
Century 21 HomeStar - Akron, OH

I first became aware of you with your most recent post on April 17.

You have some valuable info here.  Thank you for sharing it.

Apr 17, 2011 03:58 AM