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Many of our clients are picking up great deals every month on rentals in the Sacramento Area!

It is interesting to hear our Investors during our Sacramento Investor Bus Tour. Everyone has a different gouge of what needs to be done for a rehab project.  

Here are some things to think about when starting your next investment rehab project.

Rule#1: You don't have to live there!

Of course, you have to make sure your unit is up to par and must meet minimum heath and safety standards.  I am not telling you to be a slum-lord. BUT.. Remind yourself..You don't have to live there. 

This is a fine line you must walk if you are going to be a successful landlord. This is a big challenge that many new investors struggle with. For the most part marble, slate, hardwood floors, and stainless steel appliances, do not belong in most rentals! 

Of course, the home does need to have street appeal and attract a good renter, but you do not need top of the line materials to get this effect! The hardwood flooring or top of the line appliances are not going to get you much more rent when compared to the cash investment.

Rule #2:  Watch your numbers.

This is a must!  Anytime you are doing a rehab project, you must have a budget before you start.  That way it will help you curve the temptation to upgrade when you get to Home Depot.  That rational thinking of "it is only.25 cents more per square foot to get what I want" is no longer an option with a budget. 

Rule#3: Work with what you got!

Every home or rental unit has a charm, though some take more effort to find!  Look for the attributes of the unit and accentuate them. An example would be to paint built-in book shelves bright white along with the trim to make them stand-out.

Rule#4: It does not have to cost big money to get the same effect!

Paint-paint-paint!  This is the cheapest thing you can do that will give you a big payoff! I recommend watching HGTV or search the internet for quick fix up ideas on a budget.  You would be surprised what ideas you could translate to your own project.

Rule#5:  You do not have to make everything perfect!

When creating your budget, you will want to walk-through the property and write down everything that you must fix now.  On a separate list, add any items you would like to update someday.

Be prepared, the have-tos could take a large part of your budget.  Once you have priced the have-tos, you will know how much of your budget can be applied to some items on the "someday" list.

Remind yourself, you most likely will not be able to take care of every item on the list.  Ask yourself, what can I do with remaining dollars to get the biggest impact.

Let me give you an example of something that would appear on the someday list...

Everything is fully functional in the master bathroom.  The tile work is outdated but the grout and facets is in good condition.  Updating the tile is probably not worth replacing at this point.  The cost to rip into the tile and replace it would outweigh the additional net rent you might be able to collect because of the upgrade. Painting cabinets, adding new handle pulls, and purchasing a nice shower curtain could do wonders!

I hope these 5 guidelines help you in some way on your next Sacramento rental apartment rehab.