Develop a Plan for Long Term Improvements

Your rental property investment pays off in two ways:

 -- Positive Cash Flow

 -- Appreciation

When its time to sell, buyers will be looking at these two financial traits. In past posts we have discussed the importance of keeping rents current.  You will get a better price if you are actually demonstrating the rental income ability of your property versus, marketing a projected income potential if rents were adjusted to market value.

Keeping your rental property in good physical condition, as well as periodic updates, will be a major contributor to a good price when selling, as well as getting top rents. As your property ages you should have a schedule and reserves for long-term maintenance and updates.

Here is a suggested guideline that you can adjust based on the current condition of your property. Calculate the long term improvements budget required for your property.   Set up a Reserves Savings Account where an appropriate amount of money will be saved each month from the rental income.

Curb Appeal   Tenants and buyers love a sharp looking home. Be sure to budget for these expensive projects to keep your property functioning and looking good.

Exterior paint	5-10 years	Use good quality paint, repair damaged wood or stucco and caulk cracks. Choose a current, but neutral, color scheme.
Fences	10-15 years	You can extent their life with good maintenance, but if they are leaning and falling apart, its time to rebuild.
Roof	20-50 years	A standard composition roof has the life of approximately 20 years. Higher end materials have a longer life period.
Driveway, patios & walkways	20-30 years	If its cracked, lifted or damaged, it can be a safety issue and it makes your property look dated and unappealing
Landscaping	15-20 years	While well cared for landscaping can last forever, eventually, it will likely look old and tired and need an overhaul.

Appealing Interior   This schedule is for budget planning, but only take these projects on between tenants. The schedule assumes a turnover every 3 years.

Interior paint	3 years	Pick current color schemes. If you are not sure, go to some open homes that have been staged to get ideas. Also remove outdated ceiling textures.
Flooring	6 years	Replace carpets; replace linoleum if dated or damaged; refinish hardwood as needed.
Window treatments	9 years	Replace only if treatments are dated or damaged.
Kitchen appliances	9 years	Tenants appreciate newer appliances. No need to purchase high-end appliances; instead plan to replace them more frequently.
Remodel bathrooms	9 years	Bathrooms get a lot of wear and tear, but updating a bathroom can be inexpensive provided there is no water damage to floors and walls. Keep bathrooms well maintained.
Update light fixtures	9 years	Styles change. Older light fixtures noticeably date your property.
Remodel kitchen	18 years	If you have decent cabinetry plan for a modest update, new countertops, sink, flooring and appliances.
Windows	1 time	If you have older single pane windows, plan to replace them. Choose a quality replacement window and you will not need to replace them again.

Behind the Scenes   Keep your property functioning, prevent costly damage and prevent costly emergency repairs

Plumbing Inspection	Once a year	Inspect yearly and repair all leaks, faulty faucets, fix running toilets and caulk the tubs and showers. Prevent costly water damage to your property.
Termite inspections/repairs	Once a year	Inspect yearly.  Termite inspector will also report any plumbing leaks. Early detection of termites can be treated locally and avoid the costly and logistically difficult fumigation treatments.
Smoke and CO2 detectors	1 yr/10 yrs	Replace your battery operated devices with the new 10 year lithium battery devices
Water Heater	8-12 years	Replace old water heaters before they leak. That way you can shop for a good deal rather then pay for a weekend emergency replacement.
Furnace & AC	18-20	If your heater is old, have PG&E do a free inspection and get an idea how much life is left. Again, plan for a replacement and avoid a costly emergency.
Plumbing	1 time	If you have galvanized plumbing plan on re-piping with copper as soon as you can afford to.
Electrical	1 time	If you are running your units with older, ungrounded wiring and low amps, better plan for an upgrade.