Way back in our first article, How You can Drink Starbucks Everyday and Still Retire Early, we mentioned that we saved a ton of money by “downgrading” to a smaller condo. Well, in this article, we are going to go through and give you a rundown of how you can make your place more aesthetically pleasing, more modern, add value to it, and earning more rental income- which is our ultimate goal.
To give some background info on this property, we decided that we were tired of paying for a fancy condo in an expensive neighborhood and the HOA fees associated with being in that desirable area (which almost a year later, we are still paying for). But, to add a wrinkle to the plan, we also were looking at “house-hacking” which is: moving into a property to qualify for owner-occupant financing, and then moving out after a year and renting the property out. So, because of this, we were looking for properties that would make good rentals. At some point, after weeks of checking Zillow daily, we found this condo listed as a “Make Me Move”. The owner lived out of state and was listing her rental property. We inquired about it, but didn’t pursue too much because while we were interested in getting a rental property, we were more focused on getting out of this money-pit that we were currently calling home. A few weeks later, her tenant gave his notice that he was going to be moving, so she reached back out to us hoping that we would take this place off her hands. We went back and forth on price, and some other small issues, but long story short, we ended up with this cute little 1 bed 1 bath condo for right at $40k.
The property was admittedly a little dated, and after years of being a rental, not in the greatest shape. But, the easiest, and quickest, way to improve the property was to give the kitchen and bathroom a little “refresh”. First order of business was to sell the old appliances. We listed and sold the dishwasher, oven, microwave, and fridge all on facebook and craigslist. As each item sold, we looked for newer stainless-steel replacements, also on facebook and craigslist. The kink in the plan was that our space for the fridge was smaller than the usual size, so we had a hard time finding a stainless-steel replacement. So, we found a brand new undersized fridge on sale, which was delivered to us with a small dent in the side. After a quick call to customer service, we ended up with a pretty killer deal on an already on-sale fridge. To fill up the extra space, we installed a pull-out pantry, and are in the process of building a wine rack and glass holder to place above the fridge (you might get lucky with an article on these things later). With the appliances sorted, our focus turned to the flooring. We procured some wood laminate flooring and put them down throughout the kitchen. Which while a small area, was the hardest part of this process. The third and final step was to paint the cabinets. We enlisted the help of Mr. RRR’s mother for this, who was kind enough to help us knock this out. Armed with some charcoal milk-paint for the cabinets, and a rattle can for the hinges and drawer hardware, we set out for the finishing touches on our kitchen refresh.
Here are the before and after photos of our project.
We took a kitchen that hit its peak in the 80’s, and brought it up to speed with us here in the present. We also pulled down some wall-paper in the bathroom, painted the cabinets, and are finishing up with a new shelving system. And, the best part is that we figure with the refresh of the kitchen, and bathroom, we added $100/month in rental value. And, with that increase likely comes lower vacancies, and higher quality tenants who are worth their weight in gold.
For a price breakdown on our “weekend refresh”:
- Appliances: $680 – $260 (sold appliances) = $420
- Paint and supplies: $75
- Flooring: $65
For a grand total of: $560 and a weekend worth of free time.
With our retirement portfolio primarily focusing on income producing rental properties, if our kitchen lasts the next 10 years, this $560 should net us $10,800 (even considering the standard 10% vacancy rate) in additional rental income. Which is a mind-boggling 1,829% return on investment. And the property value has definitely increased with these changes in appearance. Perception is everything when it comes to selling a property, and if we were to sell our condo tomorrow, we are confident that we could net more than $10k over our purchase price.
How could you spend a single weekend to net you over $10k in more ways than one?