What in the hell is ‘putting lipstick on a pig’? In the real estate world, this is an endearing term of dressing up a relatively shitty rental, or even personal home. Our ‘pigs’ usually have good bones, and are in good locations, but aren’t very easy on the eyes. This perfectly describes one of our duplexes. We will dive in and discuss the background of the property, first. Then, the ‘lipstick’ that we put on this pig. Finally, we will breakdown the financial result of our efforts.
A few weeks ago, Emily and I listed one side of a duplex that had recently become vacant. To give you an idea of the numbers, we inherited tenants paying $350 a month. Once they left, we spent some time getting the interior up to speed, and it was looking pretty damn fresh, if I do say so myself. Check out how we spent less than $500 on renovating the interior.
With the interior squared away, we listed the apartment at $550 a month. Firmly at the top end of the market in this particular area. However, with some fast-paced gentrification going in, we were confident that it would rent pretty quickly. We got a pretty good bit of interest, which let me know that the price was on par with the quality of the apartment. Unfortunately, even though we showed it a few times, we didn’t find a tenant for a couple of weeks.
The last person that toured the apartment flat out told me they didn’t like it at all. Literally nothing about it.
We had one big problem with the duplex: curb appeal. To be frank, the exterior of this house was the real estate embodiment of Macaulay Culkin. Sure, he was cute and funny back in the early ’90s, but those days were long gone, and today he looks more like a meth addict than a movie star.
Even roping Emily’s sister into coming over and taking some pictures for us didn’t help, and she is an excellent photographer. We were just trying to polish a turd. Potential tenants would pull up to the house and already have their mind made up before they even saw the interior, regardless of what the inside looked like. We were fighting an uphill battle inside against 40-year-old Kevin McCallister on the outside. This pig desperately needed some lipstick, and pronto!
As no strangers to DIY projects, we decided to try our hand at painting the exterior of a house for the first time. I mean, how much worse could it get, amiright? Turns out, painting the outside is exactly like painting the inside, but even quicker… who would’ve thought?
Since we decided on this little project, we needed to get the right tools for the job. Luckily, my brother-in-law had just painted his and my sister’s house in the fall, and he had bought a paint gun* for the task. With no shame in borrowing other people’s shit to save some money and keep that bad boy from collecting dust on a shelf in the garage, he kindly let us borrow it (Casey, if you read this and mention it to me, I’ll buy you lunch).
Putting Lipstick on a Pig:
Armed with a borrowed paint gun, 4 gallons of Behr exterior semi-gloss paint and primer in Graphic Charcoal, 1 gallon of Behr exterior paint and primer in white, and three rolls of painters tape, we got to work.
It took a little longer than a weekend. However, had we skipped the gym and started working a little earlier in the morning, it would’ve been the perfect length for a weekend project.
While Emily painted some fake ass shutters, I was playing Humpty Dumpty skipping around on top of an articulating ladder*, that we borrowed from Emily’s dad (seeing a trend here? Same offer above applies to you, mention this and you get lunch on me). Emily also painted the door, and I threw together sign for the street address to put on the front of the house.
Here’s a list of what we did:
- Painted the exterior and trim.
- Painted the exterior door.
- Added some landscaping with railroad ties that were laying around and some mulch.
- Added a new address sign with floating numbers
I’ll be damned if our place didn’t turn into ‘The Little Crackhead that Could’ (what a great idea for a children’s book. Heard it here first folks!)
The dark exterior paint helped cover up any previous blemishes and will hopefully help keep the house from looking dirty for years in the future. The white trim and ‘shutters’ add a nice balance to the dark walls. And finally, the ‘Joyful Orange’ door and address sign give it a great pop of color to catch the eye. All this equals some huge curb appeal and got the exterior on par, or even better than the interior.
What exactly were the fruits of our labor, though? Did the lipstick on the pig help? We didn’t tear down any walls, install granite countertops, or even install a single barn door. Would paint and a little mulch really change peoples’ minds?
We had dozens of people showing interest, which led to 11 scheduled showings. (Interested in finding out how I went from 70+ people requesting a tour to 11 qualified showings? Find out How to Get Good Tenants) Potential tenant #3 submitted their security deposit while they were standing in the living room on the tour. To top it off, potential tenant #4 went ahead and submitted a security deposit for the recently vacated unit next door that wasn’t even ready yet.
To be clear, freshening up the exterior of the house not only got us one tenant at $550 a month, but also got us a second tenant for a unit that they haven’t even seen yet. And like I mentioned before, this place is at the top of the market for this particular neighborhood.
Dolla Dolla Bills, Y’all
Let’s break down the numbers. We bought the place for $49,000 with 25% down, so $12,250 cash. We spent close to $300. That covered paint, painters tape, mulch for the flower beds, a wooden board for the address sign, and floating address numbers. Couple that with the $500 we spent on fixing up the interior, and we are looking at $800 total and a couple of weekends spent getting this place looking nicer than it has in decades.
This $800 lipstick on this pig got us $200 more a month out of each unit, so $400 more per month, or $4,800 more per year leaving us with a total rental income of $13,200 per year. Even after we deduct the mortgage (PITI), 10% vacancy, and 10% maintenance, we are still looking at a 55% yearly ROI!
Another huge added perk is that we own the duplex next door, so we hold a large percentage of the 1 bed 1 bath apartments in this area. The ones next door are slightly larger, but also slightly older. Guess what? Now we’ve painted the exterior of that property. Continuing to boost the curb appeal of our little corner of duplexes. Both of those units are also rented for $550 a month.
Emily and I have a goal with each of our rentals: make them places that we would want to live ourselves. We have no desire to be slum-lords. We want clean, good quality, good looking places that can get us clean, good quality, and financially sound tenants. By doing so, we hope to avoid vacancies, and problematic tenants which are definitely worth the effort and small amount of money to appeal to that group of renters.
But, we all know what you’re here for you greedy bastards. Everyone wants before and after pictures…well they are right after this short list of items that we used to put lipstick on this pig *:
- Paint Gun
- Articulating Ladder
- Three Rolls of Painters Tape
- Small Paint Roller (for trim & shutters)
- 6 Gallons of Behr Exterior Paint & Primer (4 gallons Graphic Charcoal, 1 White, and 1 Joyful Orange which we will use for other doors & address signs in the future)
- Two 3/4″ wood boards drilled together for the address sign (couldn’t find a 1.5″ board in the right size)
- 4 Floating Modern Address Numbers
Before & After