Answers for all of your Real Estate Questions
Two months of unpaid rent and the tenants are moving out.
Maybe I’ll be able to collect some of that money, but most likely, that cash is gone forever.
Compounding the problem is the fact that the property looks rough.
I don’t want to attract more deadbeats to the place who don’t pay their rent, so I need to make it look nice. But, I’m already quickly heading into the negative cash flow territory with unpaid rent so I have to make the rental property look all shiny and new without spending too much money.
Here are some of the ways I’ll tackle this rental, like I’ve improved past ones. You can use these tips to make your rentals look great on a tight budget too:
Low Cost Renovation Tip #1 – Kitchen Cupboards
Kitchen cupboard face lift:
You’ve probably already thought of painting the cupboards – and that’s a great way to brighten up a place and make it look fresh, but you probably will have to strip, sand and prime to make that happen. You can do the work, but the time investment is pretty high for you to get a good result.
A cool, quick and low cost way to get the same result is using a great product from Rustoleum that is called Cabinet Transformation Kits which come in many different colors. The kit costs only $100 and is really easy and quick to use. Just clean the cupboards, paint the cupboards and the end result is a kitchen that looks almost new!
Note: We did a lot more to this kitchen … including changing the counter tops and appliances and switching one set of base drawers with a regular base cupboard that was beside it. Those cupboards are the same though – just used the transformation kit!
If the cupboards are at the end of their life and need replacing, a used kitchen ‘recycling’ company in the USA will frequently sell a full kitchen package, complete with all the appliances, for incredible prices.
The dropping Canadian dollar makes this option less appealing right now, but it can still be a great deal. They even have luxury kitchens. The company is Green Demolitions, and the founder is a recovered addict and all the money goes to an addiction recover charity.
Even when the exchange rates are good, the challenge for Canadians is getting the cabinets across the border. You can drive down and bring it back or try online shipping companies.
It can be worth the effort.
This is an example of a kitchen that we purchased from Green Demolitions for an executive home that we built in 2010. That impressive commercial grade stove alone is worth $10,000 new. The entire package was worth over $75,000 if we’d purchased it new. We paid $15,000 for everything; the cupboards, island, granite counter top, the 4 foot wide double oven and we even had 4 large cupboards left over that we installed elsewhere. It cost $1,000 for us to rent a cargo van and a weekend of our time to travel and pick up the kitchen in Connecticut. We paid $3,000 for installation. So, for an investment of $20,000 we had a $100,000 kitchen.
You are not going to get all that with an IKEA kitchen. Every time I go on the Green Demolition site, I want to do a renovation just to get one of their kitchens!!
Low Cost Renovation Tip #2 – Bathroom Vanity
The kitchen renovation ideas apply to bathroom vanity renovations too!
But, a quick trip to IKEA or Costco could get a brand new vanity at a minimal cost.
If you want something a little special for a low cost you can hop on the website Pinterest for inspiration. On the left are two examples of dressers that were headed for the dump that have been brought back to life as bathroom vanities. You can find old dressers like this on Kijiji or Craigslist – sometimes free with pick up. It may take a bit of creativity, but you sure can create an unmistakable charismatic vanity. You’ll find ideas like this on Pinterest for just about every room in your house.
Low Cost Renovation Tip #3 – Fix the Holes Yourself
There are always small drywall repairs to be done before paint jobs. Save money and do these jobs yourself before you hire a contractor to do the rest of the work. Small holes are easy to cover with and sand and take no time at all. Larger holes are fairly easy to fix by inserting small pieces of wood in the hole in the drywall. Here’s a great explanation of what you need to do (with step by step pictures).
Fixing your own large holes can save you upwards of $200/hole … so it’s well worth your time to make these quick repairs yourself.
Low Cost Renovation Tip #4 – Hiring Low Cost Painters
Fresh paint always has a great payback. It makes the place feel cleaner and just makes a place more appealing for showings. It’s a low skill job so you’re probably tempted to do the work yourself, but save your back and time by shopping around for the labour.
I recently posted an ad on Kijiji to hire a painter for $15/hr and had about 20 responses!. Some even said, I will beat the lowest price. “Great,” I thought, “A bidding war, no better way to get a good price!”
Of course, you won’t just pick the lowest price. Check the references to ensure that the workmanship will be equal as well. Costs for painting 1,200 square feet with lots of trim details came in from $1,000 – $4,000 plus materials. I hired an experienced semi-retired painter who did it for $1,200 and we bought the materials at his cost at his preferred paint store.
Low Cost Renovation Tip #5 – Light Fixtures
Light fixtures are an upgrade that can really change the mood of any room. You can bring an entire space from the 70’s to the current year by changing up the fixtures. The best part is that light fixtures can always be found on sale at regular hardware stores or online.
Again, if you are handy and ok with electrical, this is a great project to do yourself to save money. Some handymen will do it for less than an electrician if you aren’t inclined to do the work yourself. An electrician can cost you upwards of $100 per hour so you can hire them to do it, but that will cost you a lot more. You can also change light switches to a new style one for a very small cost and place sensor switches in rooms that you enter frequently for short periods like a pantry, laundry room or bathroom. These are nice features for tenants and for resale.
Low Cost Renovation Tip #6 – Granite Countertops
Many think granite is too expensive, but everyone wants it. Depending on your market (it’s always important to understand your market), it could be that these kind of upgrades are expected. The younger generation wants upgrades like they had in mom and dad’s house.
If you just need a straight piece of counter top, it’s possible to do a ‘do it yourself’ granite counter top. We recently installed some of our own granite and it was very satisfying. It’s a bit like cutting plywood, except thicker and slower. You can use a regular circular saw by installing a diamond blade ($40). You get the approximate location of your line and then put masking tape down where your line will be. Then mark your line with a marker and clamp a 2×4 piece of wood onto the top of the granite, on the line you measured, with an offset of the blade to the guide on the saw. This will be the guide for the saw as you cut, so you’re not just free handing on the line. While cutting you will need another person to hold a water hose spraying water on the blade as you cut so the blade does not heat up too much.
It probably goes without saying, but you should measure several times before you cut! You want to be certain.
You will also need a friend (or, two) to help lift the counter tops when you’re ready to move them, but it’s possible that with one cut you may have your counter.
A few shims and carpenters glue and install is done. Most quotes for a straight forward kitchen come in around $5,000. You can purchase granite slabs from a local supplier or you could try Build Direct and they will ship directly to your home. In the home to the right, we purchased 4 pieces that were 6 foot 6 inches of 1-1/4” thick counter top and an island top that was 6 foot 6 inches x 3 feet, 1-1/4” thick from Build Direct. Our material cost was $1,800 delivered to our door and we had five helpers lift the island top into the house! This is the before and after (minus a few walls that we removed to open it up).
Low Cost Renovation Tip #7 – Backsplash Makes a Big Splash
This is another tenant appreciated upgrade that can be very economical if you get tiles on sale and install yourself. Even if the tiles are not on sale, you are usually only covering an area that is 2 feet by 10 feet = 20 square feet of area = 20 tiles. It does take a few steps to do the work, however it is very satisfying and does not take that long.
Low Cost Renovation Tip #8 – Crown Molding
This is a high impact addition to a home to make it look and feel like a high end property. Due to the head swirling, backwards, sideways, upside down cuts required, installing crown may not be a DIY project, however the payoff in the value it creates in your home is well worth the money you spend upgrading. Using a contractor, you will likely pay per job or per foot. You can use use cheap baseboards as a layer of the crown moldings to reduce the costs. Look close at the picture below, the lower layer is baseboard to give it a larger effect.
Our labour cost for the crown molding shown was $2.80 per linear foot. It was two pieces of trim which means the carpenter went around twice. If it was one piece, the cost would have been half of that. We bought the moldings for $1.69 per linear foot which included a crown style molding and a floor molding turned upside down. So for a 20 foot by 20 foot room, this cost $360.
The example shown has a 9 foot ceiling on the edges and 10 foot in the center. Because of that, the moldings were a little larger. With an 8 foot ceiling, you would likely only go with the one piece crown molding at $1.00 per linear foot plus $1.40 per linear foot to install which would be $192 for a 20 foot by 20 foot room.
Low Cost Renovation Tip #9 – Pay Off Your Renovation with the Increased Cashflow
Home Depot will allow you to defer payments for 12 months if you purchase on their credit card and the amount is over $299.
Need a new furnace or air conditioning unit? Canadian Tire has a program where they will allow you to purchase today and defer your full payment with 0% interest for 36 months program. As long as you make the regular monthly payments, you’re good. This is a great way to pay it off with the extra cash flow these upgrades will generate.
Low Cost Renovation Tip #10 – Shop Around
If you need materials big or small, such as drywall corner beads, lights, cupboards, doors, flooring, almost anything can be located at a local used building material store. In Ontario, you can go to Restore which is a Habit for Humanity non-profit store that has odds and ends of building materials. You have to be willing to look around and call places to ask for what you need, but if you find it, the savings can be huge. You can find everything from gently used carpets, doors, sinks, to cupboards, flooring and fixtures. And you can always take the old stuff there instead of loading up the landfills.
Watch for sales on materials. If you know you have a renovation coming up – keep an eye on the flyers. You can often get great quality materials for a low price if you’re watching for them a few months in advance.
I know all of these have helped me keep costs down while keeping the style up. One or all of these ideas should help get you through another renovation and to a point of signing up a great tenant who will appreciate and take care of your investment.