Rental Income – Home Renovations

So you took my recommendation and bought a solid, vacant, ugly house, and now you are wondering what’s next?

 At my Fulton St. property (read this first) the first priority was to get the roof checked, since there were several patches of water damage on the walls and ceiling upstairs.  Second on the list was to get all the rattly wallpaper removed.  I know nothing about roofs, so I called around and got some estimates.  Within a week or two the roof was replaced, eliminating leaks and the prospect of water damage.  With the prospect of leaks eliminated, I could now focus on improvements without worrying that things were still deteriorating.

My realtor had a hard working son in college whom he recommended for wallpaper removal.  This sounded ideal, as I had helped strip wallpaper as a kid and realized the nightmare this house presented.  I happily paid him $10 per hour, and he stripped wallpaper like it had wronged him personally.  I put a lock box on the door, so he could come and go on his own schedule, and he kept track of his hours.  His goal must be a world without wallpaper, I was amazed.

I got a great deal, and I think he did too. (Win Win)

The next major project involved the campfire / furnace in the living room.  I found an electrician / plumber / HVAC guy whom I work with a lot.  His prices are good, and he teaches me how to the do easy stuff, sometimes even turning down work, saying, “come on, you can do that.”

He removed the dragon, and set to work installing a new forced air gas system.  The house didn’t have any duct work, but it did have 9 foot ceilings leaving plenty of room to install ducts along the wall and ceiling.  Holes were cut into the bedroom floors, providing airflow, while 1st floor vents were accessed from the basement.  You are probably envisioning dollar bills flying every which way through these new vents , I know I was, but in reality it only cost 5,500 for materials, labor, and an A/C unit.  Providing central air, which is highly coveted, but rare in comparable houses, was an extra that was worth the cost.

I got to work painting the walls and ceilings, smartly using all one color this time.  Its an off white color, called Swiss Coffee, feel free to use it if you like.  I installed area rugs in the bedrooms, and made the poor decision to install carpet in the halls along with the living room.  The carpet was needed, but I didn’t know how to install it, and I didn’t ask anyone for help, and I did a poor job.

 It was foolish.

Just ask, or watch some videos on Youtube, there is no point to stumbling along blindly, people love sharing information with eager hardworking students.  Be an eager hardworking student!  The tenants recently had new carpet installed in the living room, they took care of everything, I reimbursed them.  It was a great project that took no time on my behalf, it was just a bit disappointing replacing 3 year old carpet.

Sadly, there is another renovation blunder associated with this property.  After the duct work was installed for the HVAC system, I needed someone to drywall over top, so my HVAC guy recommended someone.  This guy was busy, so he sub-contracted the project.  At this point, I was 3 steps removed from the guy I hired, much like the copy of a copy, the quality was going downhill fast.

I hired a bonehead, then gave him money.  He showed me a mirror, and I realized I was the bonehead!

The guy gave me a quote for the drywall, offered to paint the kitchen cabinets, and install new bilco doors.  He wanted half the payment up front with the balance due upon completion.  I paid up.  He completed little.  Soon, he needed a bit more cash – for materials.  Already displeased with his work, I wrote another check hoping this would alleviate the problems and get things done.

Big Mistake.

Now he wasn’t even showing up.  I finally stepped up and started calling daily and voicing my displeasure.  Slowly but surely, this got the ball rolling, he finally wrapped things up and I paid the remaining small balance.  Another lesson learned for me – research your contractors, and don’t pay up front.  Never start issuing partial payments during the work, leading to you having paid for more then has been completed.  This removes all bargaining power. In the end, I learned another valuable lesson, but thankfully the only cost was some stress and headaches.  Happily, things wrapped up, I was approved for my mortgage, paid back my father, and signed some nice tenants whose parent live next door.  They will live there for years i’m sure.

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2 thoughts on “Rental Income – Home Renovations

  1. How would you recommend paying a contractor? I believe we paid half up front and I wasn’t happy with the quality of work but we were also in a pinch and had just moved out of state.

    1. moderngol

      I would not pay more then half up front, or I would try to agree to only pay for materials, not labor until the work is finished. My plumber / electrician / HVAC guy doesn’t make me pay anything up front, but we’ve worked together several times now. Find someone who is highly recommended and hopefully you can build a relationship.

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