you’ll be getting plenty of calls for repairs. Repair technicians are pricey. Buy new and you’ll enjoy peace of mind for years.
New appliances don’t cost as much as they used to. In fact, basic appliance models are less expensive now than they were 20 years ago. Look around for the deals. It shouldn’t be too difficult to find good-sized, new fridges for under $500, stoves for under $350, and full-sized built-in dishwashers for $200.
All major structural components in working order
If your rental is part of a condominium or strata corporation, then the corporation management will take care of all exterior structural components for you. However, if a hot water tank and furnace exist within your suite, then those items are your responsibility.
If your rental is not part of a condominium or strata corporation, you must ensure that all major structural components are in good repair. Did you have a professional home inspection performed when you bought the home? You can use the home inspector’s report as your guide for the life expectancy and condition of the home’s major structural components.
All safety issues addressed
The rental property must be safe for occupancy. Go through your rental property with a safety checklist form (available in bookstores or for free on the Internet).
Fireplaces are a safety concern, especially wood burning fireplaces. Unless you prohibit the tenant from using the fireplace (through a term in your rental agreement), you’ll need to ensure that the fireplace is clean and inspected by a professional. You should also insist that your tenant provide you with proof of adequate tenant liability insurance.
The dryer vent needs regular professional cleaning too. In the event of a dryer fire, you’ll be able to show your insurance company proof of dryer maintenance.
Some landlords experience the misfortune of renting to “professional litigants” who’ll sue after falling in the bathtub. Protect yourself by purchasing your own liability insurance before you rent out the property (see the discussion on the importance of insurance later in Part 1).
Renovations That Pay for Themselves
To ensure that you receive the maximum possible rent, renovate your rental property periodically. When renovating for rental purposes, look for durable, lower cost material. Replacing the floor coverings and repainting is usually all you’ll need to do.
Although the ins and outs of rental home renovations are beyond the scope of this book, the following are a few tips to get you started.
Painting
The interior of your rental should be repainted about every five years. Often all that a home needs to spark interest is a good paint job. Neutral colours are a must. Avoid flat paint, which scuffs and shows marks easily. Don’t risk purchasing cheap mistint paint; it’s cheap for a reason.
Don’t try to choose colours at the store. Choose the colours at your rental home. How? Do as professional interior designers do. Purchase a set of colour chips from your paint dealer (less than $50). Take the chips into the rental property. Select colours by taking into consideration the flooring colours, the lighting in the home, etc.
Try to avoid paying your painter twice as much for two coats by selecting higher quality paint that offers guaranteed single-coat coverage.
Floor coverings
Avoid low-grade laminate flooring because the seams puff up easily when liquids are spilled on the floor, causing permanent damage.
Try vinyl tile, as opposed to vinyl sheet. Replacing damaged vinyl tile is easy. Ceramic tile is excellent as well.
Do you own a suite or apartment? Be aware of potential sound transfer issues. Your strata or condominium corporation may regulate the type of floor coverings you may install in your apartment.
Tenants don’t want to live on 20-year-old carpeting. Aim to replace wall-to-wall carpeting every 10-12 years. Try an economical commercial-residential hybrid (with the emphasis on residential). Try for $1.50 per square foot.
You can save significant money by removing the old carpet yourself. It’ll be easier to handle if you use a box cutter blade to cut it into four-foot wide strips before you roll it up and take it away. Consider reusing the old underlay, but if it’s full of pet urine stains or other stains that smell, forget it. Always use a professional installer to lay carpet. Never lay carpet without underlay.
You can have 900 square feet of carpet replaced for $2,500, $5,000, $7,000 or more. Never mind the carpet salespeople who recommend the carpeting with the 25 year warranty. Ask professional carpet installers what they’d install in their own home. You may be surprised how many would choose the $2,500 package first.
In my opinion, installing expensive carpet, even if it is advertised as long lasting, is too risky. When I started out landlording, my odds of choosing bad tenants were unacceptably high. I remember the pain I felt when my new “bad” tenants spilled a jar of indigo ink on the brand new carpet. Twenty-five-year warranty or not, no carpet could withstand that kind of abuse.
Kitchen/bathroom
Revitalizing a kitchen or bathroom doesn’t have to be prohibitively expensive. Have your skilled painter paint the cabinetry. Then replace the hardware, knobs, etc. Your kitchen or bathroom will look as good as new!
Your home renovation store carries very affordable plastic laminate countertops of various sizes and in attractive designs. Some modification might be required to make them fit your kitchen or bathroom, but it’s nothing a good carpenter or handyman can’t handle. Unless the rental is very high end, forget about granite countertops. Tenants won’t expect granite countertops, but they will have other expectations.
Make sure your kitchen has a built-in dishwasher. Tenants love dishwashers. No room for a built-in? Before starting any major changes to the layout in your kitchen, ask a few good carpenters for their ideas. They’ll know how to solve your problem most economically.
In-suite laundry
If your rental doesn’t have in-suite laundry already, perhaps it’s structurally impossible to do so. Or, if your rental is part of a condominium or strata corporation, odds are the corporation bylaws prohibit the installation of in-suite laundry.
It remains a good idea to assess whether or not installing in-suite laundry is possible. It’s a great renovation that will pay for itself in increased rental income many times over.
But don’t go overboard
Landlords select low-cost and durable materials not only to save money, but because returns on high end renovations quickly diminish. If you spend $4,000 on new paint, carpeting, and appliances, you might be able to raise the rent from $750 to $900. On the other hand, if you spend tens of thousands upgrading your rental with granite countertops, porcelain tile, and wood floors, it probably won’t be possible to rent that $750 home for much more than $950. Obey the law of diminishing returns by keeping your renovation plans to the essentials only.
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