Landlords are faced with a lot of decisions when it comes to their rental properties. In which area should I purchase a home? How much should I spend? How much rent should I charge? How do I find good tenants? The list goes on and on. Something that every landlord will be faced with, at one time or another, is deciding which items to replace or upgrade in the home. Often the answer is obvious: fresh paint, new flooring, new appliances, HVAC units, roofs, etc. However, other items can be overlooked but can be equally as important.
Investor, and Bigger Pockets author, Che Chiu Wong lists his “Top 5 Items to Replace or Upgrade in Every Rental Property You Buy.” The idea behind his list is to spend a little extra time and money on the front end to save headaches down the road.
1. Toilet - The main reason that a toilet is a must-fix item is because leaking toilets can run 24 hours a day. A leaking faucet or a leaking shower diverter will result in only a small water issue when you don’t turn them on. A leaking toilet, on the other hand, is continuous.
We are not even talking about replacing the toilet (although for long term holds, it’s not a bad idea either). We are talking about just “gutting” the toilet by replacing the toilet system inside.
2. Locks - Even if the lock is fully functional, you should always change the locks. You don’t know who possessed the keys before. Instead of coming up with any justifications to convince yourself why it is okay to use the old ones, just change them.
Money saving tip: If you have multiple properties, you can always recycle locks from time to time. Say you just took out the old locks from 123 Main Street. You can always reuse the same old set of locks at 456 Main Street next time when you have a tenant turnover.
3. Light Bulbs (Including Security Lights) - For common areas such as hallway, using long lasting, energy saving light bulbs will reduce your electricity bill. More importantly, new light bulbs reduce the number of easily avoidable “Would you please change the light bulb” phone calls.
Once you change the bulbs, it will be some time before you have to change them again. Each energy-saving light bulb lasts for 9 years (double-life bulbs last for 18 years). These days, as LED technology becomes more mature and costs start to become more affordable ($3 per bulb at Home Depot), we might potentially move in this direction.
4. GFCI Electric Outlets - These are special electric outlets that can shut off automatically when electricity runs through unintended paths (e.g. body, water). Such outlets run a little bit more expensive ($10 a piece vs. less than $1 a piece for normal ones), but they are well worth it in certain places for safety reasons. In fact, they may be required by law for places near water, such as kitchen countertop, bathroom, washer and dryer.
5. Fire Extinguishers and Smoke Alarms - Install a whole new set of smoke alarms and fire extinguishers, and you won’t have to worry about them for the next several years (as long as your tenants don’t tamper with them). Of course, if you use the battery operated alarms, you will have to change batteries for the alarms every year. As a hint, don’t count on your tenants changing batteries themselves. Instead of viewing replacing batteries as a chore, think of it as a good chance for you (or your property manager) to “inspect” the property as well.
Making these changes will not only improve the safety and function of a rental property, but they will certainly make for happier tenants.
To view the full Bigger Pockets article, click here.