October 18, 2021

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The 3 Renovations That Are a Waste of Money In a Rental Property

4 min read

Don’t waste your money with these three rental property upgrade mistakes. That’s today’s video. Let’s dive in. Hey, there, Clayton Morris, the founder of Morris Invest. And today we’re going to talk about three mistakes, three areas that I see a lot of rental landlords, when they’re rehabbing a home, they waste their money on some upgrades that they think they need to put in the property, but simply don’t convert when it comes to return on the investment. These are tried and true. A lot of people think that pumping money into certain areas of the home will get a higher rent, get a higher equity position in the house, and it simply doesn’t happen.

And the same is true for renovating your house if you live in it and you’re looking to increase the equity. So let’s dive into it. Let’s go to the first spot in the house, and the first one up is the kitchen countertops. I see a lot of people wasting money on kitchen countertops in their rental properties. You simply don’t need to go high-end granite countertops or quartz countertops or corian countertops. In a C-class neighborhood, in a B-class neighborhood, don’t over-upgrade for the neighborhood. And really nice looking Formica countertops are all that you need to do. It’s what a tenant is expecting in the property, and it’s going to be too costly to go put money in something that you don’t need to do like granite countertops in a property. The return on investment simply isn’t there, and there are really inexpensive, to get a nice Formica countertop that can actually look like granite. I’ve seen some nice looking Formica countertops, it’s almost hard to tell from the eyes that it’s Formica and not granite or corain. So you don’t need to go high-end with your countertops.

Don’t do it. It’s a waste of money, and it will not increase your return on investment. OK, let’s go to the second spot in the house, the bedrooms. Second spot in the house. If you have a three bedroom, one bath house, a lot of homeowners or landlords think, what if I knocked out a wall and created a master suite for my tenants, so that we’ll have two bedrooms instead of three, and they’ll have a big bedroom and they’ll have sort of a master suite. We’ll knock down the wall, they’ll have their own private entranceway to the bathroom. And that’s going to really increase my chances of getting it rented, and it’s also going to increase my equity. No. Don’t do it. Do not do it. Bedrooms count when it comes to rental properties. Getting rid of a bedroom in order to create a master suite is a huge mistake. I’ve seen people do it, it is a bad move. Stick with the floor plan that you’ve got, three bedroom, one bath, keep it that way. Don’t go turning it into a two bedroom in order to create a master suite. OK, let me take you down the hall and show you the next big mistake people are spending money on in their rental properties.

Let’s go. And the third way to waste a ton of money in a rental property is to over-upgrade the bathroom. Look, you do not need to put in a nice big tub with jets or anything like that or put in multiple sinks in your rental property or a walk-in shower or anything like that. That is not something you need to do in your rental property. It is wasting money, and this is the number one way that people waste money on a rental property, or in their own property. Putting money into a bathroom does not yield the type of return on investment that people think that it does. So you want to avoid over-upgrading the bathroom. Instead, the bathroom should look like this. Keep it simple like this bathroom.

Simple tub, simple shower with some nice tile walls, tile floor, or you can put vinyl down, no big deal, and a simple little vanity with a mirror. That’s all you need to do in a bathroom to make sure that you’re really getting the bang for your buck on a rental property. Don’t go crazy. So let’s recap. Do not over-upgrade the countertops in your property and spend money where you don’t need to. Number two, don’t knock down walls and remove bedrooms in order to make a master suite. And number three, don’t waste your money on over-upgrading bathrooms. Huge mistake. Keep it simple, keep it cash flowing, that’s the power of rental real estate. Please subscribe to our channel, everyone. We’ve got so many great videos on here where we walk you through all different levels of real estate investing. If you’re brand newbie, great. Click on the Start Here playlist. We’ve got a Start Here playlist that walks you through the thought process, getting your head wrapped around creating cash flow in rental real estate. And also subscribe to our channel. We’d love to have you here subscribing because we publish videos weekly right here on the Morris Invest YouTube channel.

Thanks so much, everyone. We’ll see you back here next time with another video [MUSIC PLAYING] Here we are at 3289 Scofield. This is one of our rehabs we’re in the middle of right now. So the whole house–.

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