Our first rental house

So, Laura and I decided over Easter weekend of 2015 to buy our first rental house. We'd been kicking around the idea of buying an investment property to rent out for a few years, primarily a condo in the city of GR, but kept running into roadblocks. Or the numbers didn't look good enough to make it worthwhile.

But on the way to Saginaw for Easter, Laura was driving and I was searching for listings online on my phone. We decided to look for something in the Forest Hills area, since we figured there'd be less competition in the burbs for rental homes, and a recent national article put Grand Rapids as the #1 rental market in the country, with a 1.6% vacancy rate.

We found this great house on Leffingwell not far from the Knapp's Corner Meijer, along multiple bike paths and walking distance to Celebration Village. We set up a showing to see it the next day, and made an offer on it shortly after going through it. It was a very well kept 1950's vintage brick ranch, 1100 square feet, with hipped roofs and large overhangs, a screened in breezeway, a 2 car attached garage with a second garage in the back, and a ton of flowering shrubs (in the pictures anyway).

We had the home inspected and everything came back great, with only the need for a few electrical upgrades. The previous homeowner (who passed away last Fall), even had the furnace inspected every year by a furnace company. As we've describe it, the home was like a well kept old car that the woman only drove to and from church every Sunday.

Most of the work that needed to be done was cosmetic, so we set our budget at $4500 (exactly my commission on the purchase).

Here's what the place looked like before. Wallpaper everywhere!!

We made a nice discovery after closing on the home, and found hardwood floors in the bedrooms and the hallway, which saved us about $1500 in flooring.

Speaking of closing, the day we closed, we placed the home on Zillow's rental site (Postlets.com) which syndicates to 35 other national rental websites. With just a picture of the outside of the house, we got 15 inquiries, 6 people wanted to see it in the next day or two, and the second person who went through it (in its condition pictured above) wanted to rent it at our asking price.

We were still committed to doing some work on the house, so we had a little less than 30 days to get it all done before the renter took over the house on July 1st.

Neither of us like painting, so we hired that out. We first had to remove all of the wallpaper, which was in every room in some way shape or form. It was even on the wall above the shower in the bathroom. Urrgh.

We enlisted help from the girls and started stripping wallpaper. We tried the fabric softener method, and used multiple kinds of chemical strippers. At the end of the day, it really comes down to hard unending scraping. Luckily there was only one layer!

In addition to hiring out the painting, we also hired out carpet installation in the Living Room. The Dining Room had previously been carpeted, but we decided to do laminate floors in the DR and Kitchen, and install them ourselves. We were going to put laminate over the existing vinyl floors in the kitchen, but with some logistic issues (being able to get the dishwasher out if it needed to be serviced, for instance) we decided to just do the Dining Room and save the kitchen for later. The tenant was okay with that.

Our first go with installing a cheaper laminate floor in the dining room was a disaster. After putting in and cutting about 4 boxes of it, we realized it was chipping too easily and breaking and gapping in spots, and would never hold up to people walking on it. We ripped it all out and thankfully Lowe's took all of it back for us.

Lastly, we changed most of the light fixtures, added knobs to the kitchen cabinets (kept the original oak cabinets that are in good shape), changed out the ceiling fan in the master bedroom, and had a cleaner scrub the place.

So in essence, we:

) Pulled all the carpet and pad out
) Took out the wallpaper
) Had the walls repainted, two-tone in the kitchen/eating area
) Installed Pergo floors in the Dining Room
) Had new carpet installed in the Living Room
) Cleaned the discovered hardwood in the bedrooms
) Changed multiple light fixtures and a fan
) Added new knobs

Total investment about $4300, which was $200 less than our $4500 budget.

Between what we are getting for rent and the mortgage payment (PITI, non-homestead taxes), we'll net about $400/month.

 

We think the home is lighter, brighter, and best of all, RENTED!

If you would like help finding a similar opportunity, let me know and I'd be happy to help.

- Jeff