Morris Invest: The 3 Renovations That Are a Waste of Money


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–

100 thoughts on “Morris Invest: The 3 Renovations That Are a Waste of Money

  • Excellent points. The people who rent the level of houses you deal in are looking for a decent home, not luxury. This may sound funny but the one thing I've learned to spend money on is a really GOOD toilet. The cheap ones have poor design and plug up easier, which is a hassle for everybody. The ones guaranteed to flush '12 golf balls' or whatever they claim, are worth the extra because you never have problems (even though it is usually the tenant's responsibility).

  • I somehow disagree with 1 and 3, tenants do want to be able to enjoy new things in the house for what they're paying for and actually the newer the property the better, like up to date bathrooms and kitchens, its much more easier to get rented out and could save you a lot of money on vacancy costs, just got to watch out for other rental properties that were competing with your rental property like you said its a people's business.

  • Disagree on first point of counter tops, when water gets in wood or heat marks get on the plastic you will be replacing for each tenant meaning a lot of replacing and the cost of installation each time. Peoples work is more expensive in many places than material costs. I am not sure where you are, may be different.

  • The rehabs you will do on your own house are not the same as you would need to do on a property you're renting out. Ignore HGTV and listen to Clayton instead 😉

  • Thank you for this information.  I am guilty of this on my past rental property renovations.  I have since learned and I continue to search for useful resources such as this video.  Thank you for keeping it so very simple and to the point.  🙂

  • My friend! It's almost 2am in the morning but I feel I need to learn what I already know 🙂 sometimes I'm tempted to spend money in a stupid way. So thank you for pointing out mistakes

  • 100% agree! You never know what kind of damage may be done to your rental property by the renters so keep it basic and functional…!

  • thanks for replying to my last comment! I just subscribed. You mentioned you guys do C class homes for 40-50k. Do I give you the 50k? Or do we use debt to finance the home and put a percentage down, but then again interest would be high for me being a teenager…. I really would like to learn these things. Do you guys offer a course? Or someway to learn in detail ways? I know for sure I'd be willing to pay thousands for that kind of information. thanks!

  • renting vs buying hot water tanks? on my new property the last owner rented his tanks that came with free service, just the math didnt make senes to me. you can buy a water tank for $400 or you can rent it for $20 a month so you could pay it off in under 2 years.

    if you are not paying utilities is it worth upgrading windows?

    thaughts?

  • Any thoughts on carpet vs laminate, vinyl or ceramic tile?

    We have been using 48 cent per foot carpet and 48 cent per foot laminate floors.

    The laminate floors give us trouble when people get it wet and tile sounds tempting but gets to be more expensive because of the install and like any material it can break and need repairs but that tile no longer exists. And carpet gets ruined pretty quickly depending on tenants.

    What have you seen to be the better performer on your rentals?

  • Clayton..love the video. We have a primary residence that we are going to either rent or selling in a few years (C neighborhood) to pursue rentals. The house is paid off. The kitchen is currently being remodeled.. What type of countertop would be best.We go back and forth on it..We will do the work ourselves; my husband is a contractor. Thoughts?

  • Hi Clayton,

    Great content I really enjoyed this video! You had mentioned not combining rooms to make a master suite but what about combining a room with a one car garage and adding a second bathroom? My home is a 3 bed 1 bath and the 3rd room separates the garage from the rest of the house ( I think it was an old breezeway). Both the garage and third room are in pretty poor shape and need a fair amount of repairs before I do anything anyways and the current bathroom is just pitiful. Would it make more sense that way for better rental/sale returns? I would love to hear your thoughts.

    Thank you,

    Sam

  • When land lording, make the house a reasonable livable space. Don't make it a palace. When it comes to selling the house, put upgrades in the kitchen and bathroom. If the neighborhood upgraded from B class to A class, reconsider the master suite.

  • good advice. my wife wanna buy this house but listed for 190000. listed in nov2017 for 210000. listed for 6 month now only 190000 and i still think the house should go down more because Zillow estimate 174000. but i willing to pay 183000. what should i do? any advice anyone? i buying a house not to invest but i want to buy so rental can help me payoff house in 7 yrs. needed advice.

  • Clayton! I'm a 33 year old landlord with 21 units in NC. I came across your channel and thought, "wait… what? Is this the guy from Fox News!?". Haven't watched F&F lately, didn't realize you left last year. Never knew about your real estate background… and now I'm watching these videos, and I'm like wow, this dude is one of us! I never pictured a big name in broadcasting advising me to stick with my laminate countertops. So down to earth! Man, I knew I liked you. Thanks!

  • Renovate in direct proportion to the value of the house. For example you would not spend $50,000 on a $80,000 house it would be more like $2,500. Common sense

  • Use formica and a countertop Big Box store supplies only Lowe's Home Depot Etc. Kitchen floors go bad vinyl flooring is the best

  • totally disagree about the countertops. Granite lasts longer (takes abuse), looks better, and you can get decent deals so you won't be paying that much more for them.

  • First of all, I appreciate all your hard work with the videos, I love all of them. If I am not mistaking you invest usually homes around $70K to $100K so it makes sense to do the very simple renovation but If you do $500K rental property with 5 Bedrooms with 3 Bathroom, what are your thoughts on that? I am currently interested in a single family property that 5 Bedroom and the neighborhood is usually 3 or 4 bedroom neighborhood, I was thinking about the knockdown 1 bedroom to make master good size bedroom so I can have 4 bedrooms 2,200 sqft single family. I'll really appreciate your advice in this price range situation. Thank you so much

  • Clayton: I have two units. Currently I live in the larger one but plan to rent it out when I retire. In the smaller second floor unit ( One bedroom) I don't allow the tenant to have a washer and dryer (too many accidents and ruined ceilings in the first 10 years). Besides, there is a laundromat around the corner. Also, the tenants seem to do laundry for every relative within a 50 mile radius LOL. Which jacks up my water bill. The first floor apartment where I live is a larger 3 bedroom. When I am ready to rent it out should I install a washer and dryer or stick with the no washer and dryer rule?

  • Inexpensive glass shower doors is better at least as a courtesy for renters and buyers. You can get inexpensive granite countertops too.

  • My biggest mistake was thinking I could renovate a house using YouTube and Home Depot DIY books. I've had it rented for 8 years now, but the quality could have been so much better.

  • Never add a shower door or bathtub door/ go with single unit fiberglass surrounds for showers and tubs over tile…. those doors to showers and tubs, they will just add to the filth and disgust to have to deal with when a tenant moves out. It is rare for a tenant to keep those up, they might, but they are horrible horrible ideas…. If you have this situation in a rental already and it is not disgusting already, fine, leave it…. but, when you have a move out, it will highly likely be a disgusting gross nightmare and you can probably pay someone to get it clean, but it will never look all that clean… and you also want a home that, if you had to clean it yourself, has the least amount of crap to deal with…. people can put up shower curtains… by all means NEVER ADD one on purpose.
    Also, if you ever have to replace a tub or shower, go with a single unit fiberglass job… it is usually easier to clean and lasts longer than tile jobs… many tilers do horrible jobs anyways and showers that get used a lot will look horrible very quickly… pluse tiling jobs around showers, because of the horrible jobs tilers do, will leak into the walls…. just go with fiberglass if you can… of course some situations are difficult to put in a fiberglass unit (don't do the two piece) and you may be forced to go with tile or something else… and some tenants might find a way to destroy a fiberglass tub within a year… but, tiling has always been a problem for me… in my own properties and in the properties of people I have helped work on, time and time again… some tile jobs are done well, but in my experience, they RARELY are done well and the grout is disgusting almost all the time

  • Well, with a quartz countertop, which is supposed to be the least distructable surface (need to do more research), there are two advantages… one, being the virtual indestructible quality of it and two, you may get a larger pool of potential renters to choose from and thus, be more likely to find good tenants. I have helped people look at rental properties in my area…. and they won't apply for sub-par places… not that laminate countertops are sub-parr altogether… but, if the laminate is remotely crappy, and it can get crappy real fast… it will be a turn off to a lot of good potential renters. But, for the most part, if you as an investor landlord want to not overspend, I think the advice is actually right on… if you feel a stone countertop is a good idea, just don't do it unless you can get a good deal.

  • Hi Morris, good video. Can you make a video on what appraisers look for. if you are using har oney, you need the house appraised for a certain value, which means renovating the house beyond making it rent ready.

  • Have one question: How about Kitchen cabinets? How much money should be put in considering it’s an older home? Thanks!

  • Bull crap, if you want high rent income you give a high end unit. If you want section 8 income you give a budget unit. You get what you give.

  • I been using Rust-Oleum countertop resurfacing kits, $80, and bath tub resurfacing kits. $45. most tenants dont care as long as its clean and fresh appearance.

  • He is wrong on the granite. Laminate tops are junk and fall apart when wet. Spend the money do it once and be done with it.

  • Forget putting in garbage disposals. They are the stupidest thing and they will waste your time with service calls. They have a trash don't they? They can put the old food in there. Oh and I hate ceiling fans too.

  • "Keep it simple, Keep it cash flowing" #gold…thanks for this vid, this will keep me from getting too emotionally on the next Reno project that I have approaching…

  • This only goes for renting !. If you upgrade your own house in a grade A Nabor hood it is worth every penny !. And people like to pay more if there getting a new house 🏡. In a grade a area cause they don’t want to deal with renovating. I sold my house for 80 k more than asking because of the renovation I did , I would have never if I left it the way it was 1975 looking .. if your gonna rent out property you shouldn’t even spend a dime . And you get more for more bed rooms .

  • What then is an area that a landlord might improve on to get rent or higher sell price in class C nhood? My kitchen does not have a dishwasher or garbage disposal in the sink…should I upgrade?

  • Good video but the first two points were pretty well no-brainers I thought. Of course it depends on who you're renting to. Still great job on the video

  • Just got a contractor bid earlier on a property and this video will save me money in the near future. Thanks Morris Invest!

  • I have a question one of my rental properties is in an area that has sever hard water this can damage pipes and appliances after a few years. I wanted to install a water filtering system in this property, so my tenants have clean and filtered water in the house. Will this help in selling the house or increase the renting price of the house or neither?

  • I live in an apartment and see many apartments in the area with astronomic rents just for worthless upgrades such as countertops and double sinks. So absurd. As a tenant, you could not care less if the countertops are shiny or you can parallel brush your teeth!

  • Quick Story: My friend rented a house to a family that cooked mainly curry's. He tried everything to remove the odious smell from the kitchen cabinets, but nothing worked. Had to get a whole new kitchen – better to have a cheap kitchen just in case

  • I disagree about the kitchen counter tops. There are many great agencies that do kitchen exchanges. You can buy an array of units, appliances and high grade counter tops for 10% of the retail price.

  • What if you have a 4 bed 1 bath though, can you combine 2 rooms then? I don't see 4 different renters all getting along well

  • I bought my first house and rental property (side split duplex) about a year ago with my boyfriend. A B/C-class 1912 home in an A-class historical neighborhood in a city. Each side is 4 stories with an unfinished basement and attic and one side currently rents for $1,775. It's been successful enough that I dropped out of college and quit my day job. First thing we did was put in AC and waterproof the basement, got new furnace and redid the roof. We're living in one side and renting out the other. After living in it personally We've decided to completely gut the kitchen, got rid of a downstairs bathroom to make it bigger. And gut the bathroom upstairs and move some walls to make it bigger. The thing I couldn't stand about the kitchen was that they were builder grade kitchen cabinets and outdated granite, it had an awkward angle, and wasn't as functional or beautiful as it could be. Even as a tenant, if I was paying $1,775 I would be completely unsatisfied with average or below average kitchen and bathrooms. They also had too many flooring in the house, original oak, new bamboo, different tiles in each bathroom and the kitchen. So we streamlined that as well. The house and the work put into it so far as probably set me back $750,000. Fortunately, we can absorb that cost even if it turns out to be a waste of money. We plan on moving to the other side once renovations are done, and putting it on airbnb. The closest competition as far as location, size, and amenities are priced at 350+ a night with 100% occupancy booked out months in advance. I figure that once I finish remodeling both sides, basements and attics included, I could charge around 600 a night conservatively. At that rate, even at 50% occupancy I'd be able to make my money back much faster than renting could ever get me. I understand that as a traditional rental, or even an airbnb this might not be necessary but we are going to transition into doing airbnb full time and then branch out to holding events there as well.

  • If I could rephrase what you said I would say to buy the very DIRTIEST house on any street and improve it up to the level of the AVERAGE house on that street. Never buy the AVERAGE house on any street and waste money over-improving it to be the BEST house on the block. The value of the average houses on the street will always drag down the value of the best house on the street and you won't recoup your investment.
    Just retired after investing in fixers since 1974. Why did it take me so long? Because I made every mistake in the book, two or three times over.

  • Good commonsense advice. The video background "music" was irritating, making it more difficult to hear the commentary!

  • Guys, I'll add number 4 for him because he should have had 4. 4 is always better than 3. So, number 4 is NEVER do a completely finished basement. Simply make it look open and fresh. Spray the ceiling black, off white or gray. Spray the cement walls and roll the floor gray. That's it. Finished basements can cause problems. If a pipe leaks you have to repair the ceiling. If the basement floods…..well you get me drift. Also, you can wind up with an extra tenant living down there that isn't on the lease.

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