Estimating “Rental Turnaround Cost”

“Normal Wear and Tear“:   The inevitable physical decline of the condition of a property from time and usage. Normal wear-and-tear increases over the useful life of any property or asset. It results from normal usage by its occupants as well as from weather and other natural forces that surround it.

Would-be home Sellers instead contemplating becoming landlords need to weigh not just such issues as management headaches and market risk (the chance that home prices will decline while the home is rented), but also the cost to return the property to tip-top “For Sale” condition at the end of the lease.

Unfortunately, the investment needed to turn a beat-up rental into a pristine, “owner-occupied” home can be considerable — and greatly exceed the landlord’s security deposit.

So, the home owner may be obliged to pop for new interior paint, carpet, appliances, mechanical’s (furnace, water heater, a/c), bathroom updates, etc. — especially if those things were already dated at the beginning of the rental.

On the outside of the home, such costs can include new exterior paint and landscaping.

Total bill?

Depending on the size of the house and the projected selling price, anywhere from $5k to $20k (or more).

Often times, that number swamps any financial benefit from doing a short-term rental.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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