Investment Property, what to repair on?

Surfing the web, we found a practical article about what is concerned on reparations in investment property. With a right point of view the journalist mesures interesting strategies depending of long rental properties or fix and flip homes:

When I buy houses I want a great deal.  I try to buy houses at least 20% below market value and that usually means the houses I buy are in pretty rough shape.  I spend a lot of money on when I repair investment property and it is very important what I do and don’t repair.  I fix and flip homes 10 to 15 homes a year and I also have 7 long-term rental properties.  I have a completely different strategy to repair investment property depending on if it is a fix and flip or rental property.

Keeping repair costs as low as possible, while still making homes nice is a key to my long-term rental strategy.  I detail my strategy in my complete guide to purchasing long-term rental properties.  I include articles on buying, selling, renting and detailed figures on my properties.

Differences when repairing fix and flip vs long-term rental properties

With my long-term rentals I tend to make fewer repairs than I do on the fix and flips.  I will still make the rental property look very nice and make sure it is safe, but I won’t do as many repairs as I would if I were to sell the home.  The reason I don’t fix as much on a rental property is because renters aren’t nearly as picky as buyers.  Most renters do not think of a house they rent as their property, they aren’t as concerned with the age of the mechanical systems or the finish details, because it is not their house.  If something breaks, the landlord will fix it, or at least should fix it.  I have found renters to be very nonchalant about light fixtures and paint color, where buyers are very picky about these items.  In rental property number 7 I left he brass fixtures in the home as an experiment to see if it would be hard to rent (we usually put in nice brushed bronze).  It rented right away and the renters did not even seem to notice the fixtures.

In a fix and flip we will always replace the fixtures and make sure the little things are perfect, because buyers want a home they are buying to be perfect.  The buyers won’t have a landlord to fix anything, they will have to the repairs themselves or pay someone.  A buyer will also most likely hire an inspector who will go through the entire house.  That inspector will find most items wrong with the home and buyers will often get scared off by an inspection that finds many things wrong.  We try to have as few items mentioned on the inspection as possible.  I know many fix and flippers who have an inspection done on their homes after they do repairs.  This allows them to make repairs the inspector finds before listing the home and to advertise the home as pre-inspected… more