How Much Should I Spend on My Property to Get a New Tenant?
What is the answer? Are you ready? The answer is….. The answer is….. The answer is…
Well, the answer is “It Depends.” (How is that for a generic, non-specific answer?)
Hi, my name is Adam Johnson, I own 2 rental properties, and my company works on hundreds of vacant rental homes every year. We do Interior Painting, Cleaning, and Carpet Cleaning. Please allow me to make a few suggestions when it comes to the question of “How Much Should I Spend on My Rental Property?”
Before We Discuss Money, We Need to Determine what Type of Landlord You Are.
There are two different types of Landlords: “The Cheapskate Landlord” and “The Guilty Landlord.”
“The Cheapskate Landlord” – We all know this guy. He never fixes anything, and he tries to squeeze as much money out of the poor tenant as he can! He is a master of every detail of his lease, and he is constantly looking for excuses to get out of “returning the deposit” at the end of the lease.
There is also the “Guilty Landlord.” – The Guilty Landlord feels in their heart that they must provide the absolute very best for their tenants. The logic being, if they will “just provide the best,” then the tenant will, in return, be so appreciative, and as a sign of gratefulness, the tenant will care of their precious rental home as if it were their own.
The Guilty Landlord also believes they are being immoral if they do not provide the very best paint and the very best appliances for their tenants. Why? Their tenants are now part of the family, and they feel they must treat them as such.
What Type of Landlord are you? Do you identify with one of the examples above, or do you fall somewhere in between?
Two Quick Assumptions – First, you probably are not a “dead beat landlord.” 2nd – You probably do not have an endless stream of cash to put in your investment property.
Please allow me to put your mind at ease. I do not agree with either of the landlord types mentioned above. Its pretty obvious why “We should not be Dead Beat Landlords,” but let’s explore the concept of the “Guilty Landlord” a little more.
Fact 1 – No matter how good you treat your tenant, they are not going to “treat your home” as good as you would want them to.
As a landlord, you need to know this little secret. “When you get the home back, after the tenant leaves, it is not going to be in the same shape as when you left it, and that is ok!”
I am not saying that you should expect a tenant to demolish your home. (You should not. That is why you screen tenants.) But, you should know that they will not be as motivated to fix cosmetic issues, as you would be. Of course they are not. Why? It’s their rental home, it’s not their home.
Fact 2 – Your tenant is going to move away. Quite frankly, they may be moving in as little as 12 months.
Why would you spend tons of money to get a new tenant only to have to repeat that process in a year or two?
I think you see the point. Think of your rental property as what it is. It’s an investment property. It’s a business transaction. It is not the emotional home that you remember raising your kids in. It is now a business, and to be successful, you need to think of it as a business investment, not an emotional memory!
Now back to the original question…
How Much Money Should I Spend to Get a Good Tenant?
The answer should be…. Spend the least amount as possible, while still providing good quality to your future tenants and still providing value to yourself…. To put it another way, “Don’t spend more money on your property than is a worthwhile investment.”
Let’s bring the theoretical to the practical. Most rental homes need some interior painting at the end of the lease, but most rental homes do not need a “full paint job.”
Have you considered “Touch Up Painting, not Full Painting, for Your Investment Property?”
Touch Up painting will make your investment home look and feel new but at a fraction of the cost.
How to Do Touch Up Painting of Rental Properties
- Get a small sample of the paint off the wall.
- Take that Sample to a paint store, like Sherwin Williams, and ask for a paint match.
- Use the “matched paint” to paint the areas that need painting, and blend the paint in with the areas of the wall that do not need a new coat of paint.
You can make a property look and feel new by using this method, and it’s a fraction of the cost compared to a full repaint.
(This method works best with Flat Paint. Its harder to match paints with sheens.)
So What is the Point?
The point is to be strategic with your rental property. Yes, “do right by your tenant,” but understand this point. You own an investment property, aka, you are now in “the real estate business.” You need your investment property to make money. If you spend so much money on your property that you no longer make money, then what is the point? What good are you really doing?
Conversely, if you are so scared of a “little damage” that you never rent the home, what good are you really doing?
Being a landlord is being an entrepreneur. All businesses have expenses. Be wise in how you spend your money, and always have the thought in your head, “What is my return on investment?”
Adam Johnson owns TurnClean Services.