OK- the news is that DH has a job offer and we are probably moving to Portland.
This means that in spite of the fact that we just got the solar panels (funny how things work this way) we will be moving.
We are currently mulling over whether to sell or rent out this house. Currently our house value is less than what we paid. This means selling at a loss. But the monthly rental income would be about $200 above our current mortgage payment. The better choice financially could be renting it out.
Either way, I will need to complete a bunch of unfinished and maintenance projects before I move. And my big "total gut job" plans for the master bath renovation are right out. However- the extent of the work I do depends upon whether I choose to rent or sell.
So- what would be the difference between a "Designed to Sell" and a "Designed to Rent" renovation?
In my mind, if I were planning to rent out my home, I would use the most durable, neutral surface materials possible like quartz composite counters, tile floors, washable paint, etc.
Portland Oregon or Maine?? My sister lives in Portland, Oregon. I really like it there. The weather is great and it's a really friendly city.
So, onto your question. If I were to rent, I would only do the bare minimum. Renters expect less than someone who would buy. What exactly do you need to get done??
Up until about a week ago I was planning to renovate my master bathroom and my kitchen to fit my own style.
Now- I'm looking for cost effective.
No matter if I rent or sell, the master bath will need changes. I was going to change the layout, but now I think I'll concentrate on updating fixtures and finishes.
If I rent, I would probably leave the white 4x4 basic tile. If I were to sell, I'd probably tear it out and replace it with something nicer. Since I can do my own tile work, the costs would be limited to materials. The sinks are old enamel coated metal. Contractor grade from 20 years ago means rusting and definitely need replacing. Renting means replacing just the sinks and faucets. Selling would mean trying to keep the cabinets, but replacing the counter top as well.
So- there's an example of the difference.
In the family room, the carpet is getting pretty worn. My original plan was to replace it with cork flooring. If I were to rent, I could probably just get it cleaned well. But if I sell, I would need to replace the carpet with something that looks better. (especially since the carpet is green- not to everyone's taste)
In the kitchen I have been gradually replacing white appliances with stainless steel. (as we could afford it). The only think white now is the range. I suppose even if I were to rent out the house, matching appliances would give a better impression and attract better quality renters.
Right now the cabinets are stained oak. Dated. I don't know that it would make much difference as a rental, but the kitchen might show better if I painted the oak cabinets. The counter is white laminate with a wood edge. I've always hated it! So- either renting or selling- probably should change out the counter. I was considering granite overlay.
How much should I budget for rental improvements? How much should I budget for selling improvements?
TQ, I am so jealous and since I used to live in CO towns and would love to have bought front range in Ft. Collins then, Portland is an amazing city and coming from Denver? you are going to have so many darling walkable neighborhood choices. Not that moving is ever easy, but lots of positive to look forward to.
Here's just one opinion - rent your long term asset so long as you can break even and you have the time to put in / or you budget for local support. I want to look at your questions in more detail and post again.
My initial response without seeing recent photos so you get the most rent / always have it rented.
Master bath - leave 4 x 4 white, but splurge on 2 x 2 mosaic in carerra honed or something that looks like it. cut out only one row of feature tile around the 6' mark, and insert mosaic for instant expensive look.
Change countertop by using quartz / solid surface that mimics white stone mosaic tile since you have to do sinks and faucets. Get bargain option solid surface w/ low maintenance. If the cabinet is still wood, use gel stain to freshen if need be.
Here's the savings -
Instead of cork, put down the vinyl wood look plank floors. At the high end, they are not expensive but they look great and wear great. Not a bad choice for now no matter what you do.
Leave the range for renters - it frees up capital for other things they will care about more, and then when you move back in retirement or choose to sell later, you can invest in a feature stainless or enamel stove. Don't paint the cabinets because wood is lower maintenance, just scotts liquid gold them / use restore a finish if need be.
But if you can with these savings, I'd do the countertops - again in a quartz solid surface below granite look - it is lower maintenance but looks expensive and many prefer the very clean solid expanse. Match the white marblish look from the bathroom so you get the benefit of a slab if it fits, or look for a remnant for the bathroom.
Just one opinion - you've got categories. The other thing when I was staging my last place is buy new master bath linens that are a little nicer than per usual. Hang them out here but take them with you to your new place. Don't spend all your $ fixing what you won't live in - some new rugs and linens travel well.
Outside of the decor issue....
If you decide to lease it, hire a professional management company. Your realtor will likely know a reputable manager or two. The fees are generally 9%, they do all the background checks (yes, you need those!), maintenance, advertisement, repairs, etc. Those expenses are all tax deductible as well.
My property along the front range has been rented since 2007. Keeping the property also gives you the option of "moving back" if you want to return to CO (oh how I wish we could...)
Congratulations! Exciting news -
W/o seeing any photos or having any add'l info (see below), my initial reaction would be to do the absolute minimum for a rental, e.g. no range change, retain countertops, clean carpets, lemon oil on oak cabinets and clean, clean, clean everything else.
Before doing anything at all, I would visit competing rental homes in your neighborhood/area to assess their condition, upgrades and rental rates, etc. I would also consider my probable or prospective tenant profile, e.g. families, college students, single professionals, etc.
Besides that, I would prepare a complete cash-flow estimate including all my costs, e.g. maintenance, increased insurance, mgmt fees, depreciation, replacement reserve/depreciation, misc, et al. Then, I would calculate my after-tax, negative cash flow to complete my sell/rent analysis.
If you'd like any add'l RE comments, you might consider posting (with photos, if you need staging tips) in the RE forum.
JMHO and best of luck to you -
I'm leaning towards selling, if you're not underwater on the mortgage. If there's any wiggle room, I'd sell and be done. Also, at some point the IRS will consider your CO home as income property and there could be tax consequences when you sell later on. Junk Collector and Bearcat have given sound advice. It's going to be a tough decision for you either way. Good luck!!
We have owned rental properties for 30 years. I currently work in code enforcement, much of which deals with rentals.
I would sell your house if at all possible. The rentals in our are have changed over the years. It is not worth the headaches to me. I am sure that there are good managers out there, but in our town they are the worst properties that we deal with. They like to pride themselves on "keeping them rented" for the owners.
There seems to be little concern for the quality of the renters that they get. Also, does your town have any rules pertaining to rentals? A neighboring town charges $1000 for a new rental license. Many communities try to discourage an increase in rentals.
I too am leaning toward resell vs rent in your situation with neutral, medium range upgrades. I. Am curious though...what will be the distance between old and new properties? Renters generally are hard on rental properties and if this turns out to be your experience it could mean more labor and expense down the line. What you might weigh is the ongoing expense now and down the line vs rental income though the actual figures are difficult to predict. For these reasons, I too would invest in making your current home appealing to perspective buyers. Then, your focus could be on your new home.
A new and exciting chapter for you! You have been given many good pieces of advice. You may also want to consider checking into insurances for rentals. Get the details, then decide if renting will be worth it for you.
Another thing to think about is if you begin renting, might you decide to sell later? If you did, would you then feel you'd need to go back and do other updates to put your house in a seller's market?
Good luck in your new adventure!
thank you, all, for the feedback!
After looking over the relocation package offered by the prospective employer, we decided:
a.) this was too good an offer to pass up. We are definitely moving!
b.) with all the help in selling here and buying there, it's a no brainer. We are selling.
As much as I hate to leave when we just got the solar panels- looks like we are leaving.
I'm trying to wrap my head around all this and set a reasonable budget for my new "Designed to sell" way of thinking.
Some of your ideas will come in handy for selling (not just renting)- but now I need to go through each room and figure it out. I'll post pictures later.
It is always nice to have some big decisions made so you can move on the rest. Congratulations to you - I hope this will not take you too far from your dear family and that all good things await - we all wish you both the very best. Portland has so many charming preserved craftsman homes and cottages.
TQ, that's a sound and wise decision to sell. Good Luck!
of all the advice junk collector's was the best! it can be very difficult being a long distance landlord...
as to the renovations? just how much you do, should be considered in what type of renter/lease you want...yes, it should be a neutral as possible. the finishes should be able to withstand abuse, and lack of care...i'd check with your realtor, to see what they suggest...for example do you go for a lesser grade carpet that can be replaced over a carpet at all?
don't know if you've ever lived in the great nw, but we only lived in seattle for 2 years in the 80's, and would return in a heartbeat...
The sellers assist program that comes with the relocation package will include having two different market evaluations. I'm guessing that these will include letting us know what we need to do to get the house ready to sell- but we pretty much already know the absolute musts!
There are, however, several things that are question marks- and though I'm itching to do it "right"- I have to consider what would be a good investment for resale.
So- unfinished projects and maintenance issues are the number one priority. After that, I'll deal with low cost cosmetic issues that would make it easier to sell. After that, I'll work on the details- things that make me feel better about what the buyer would walk into when they move in. I'm not talking about expensive things- just things like making sure I've thoroughly scrubbed the cabinets inside and out. Or having the carpets cleaned. (my last house I was vacuuming my way out the door as I left)
We left our last house in pristine condition- and when we moved into this on- UGH! It was such a disappointment! I want the next owners to feel good about what they are getting.
So I have some work ahead of me! I'll post pictures as I get to the different aspects of the project.
Oh- and you know what makes this really tricky? I want to downsize- which means getting rid of a lot of stuff before we move. THAT is what I'm working on right now.
Your decision I know was hard, but I think you made the right one.
We just went through some renovations to sell, like you they were a must. The upgrades to our bathrooms and kitchen remodel will only make the process to sell easier, I wish you the best.
|Powered by Social Strata|