How Much Do Renovations Cost for Rental Properties? Affordable Housing Podcast Highlights

Why Renovation Costs Matter for Affordable Housing Investors

If you’ve ever asked yourself, “What does it really cost to renovate a rental property for long-term cash flow?” this compilation episode of the Affordable Housing & Real Estate Investing Podcast is for you. Across conversations with multiple past guests, we’ve gathered real-world numbers and strategies on how investors are transforming standard single-family homes into higher-value rentals that serve both Section 8 tenants and co-living residents.

Renovations aren’t just about new paint or shiny kitchens—they’re about creating long-lasting, livable homes that attract quality tenants, meet inspection requirements, and maximize return on investment. Whether you’re an affordable housing developer, a new investor, or a community advocate, understanding these costs will give you an edge in today’s competitive housing market.

How Much Does a Full Rental Property Rehab Cost?

One guest shared an example of a three-bedroom, one-bath home purchased for $555,000 in a C-class neighborhood. After renovations, it became a five-bedroom, three-and-a-half bath property with modern systems and upgraded finishes.

• Renovation costs: $205,000 (electrical, plumbing, permits, finishes)
  
  

• All-in costs: ~$760,000 after acquisition + rehab
  
  

• Rent: $5,462/month, with strong appreciation potential
  
  

Takeaway: Adding bedrooms and bathrooms not only increases long-term property value but also speeds up rental demand, especially for Section 8 tenants.

What Renovations Matter Most for Section 8 Rentals?

Guests consistently noted that Section 8 families want the same thing every renter does: a clean, safe, comfortable home.

• Durable flooring: Vinyl plank (20 mil) lasts 25 years and saves thousands compared to carpet cleaning.
  
  

• Fresh paint + curb appeal: Better-looking homes attract stronger tenants.
  
  

• Bathroom additions: While Section 8 doesn’t always pay more for bathrooms, units lease much faster with them.
  
  

How Much Should You Budget for Common Renovations?

Based on shared experiences across multiple projects:

• Bathroom remodel: $7,000 for a full gut + rebuild
  
  

• Small kitchen renovation: $10,000–$80,000 depending on finishes
  
  

• Garage conversion: $10,000–$15,000 for two extra bedrooms
  
  

• Flooring: Vinyl plank $2/sq ft (or $0.50 if imported)
  
  

• HVAC replacement: $5,000–$7,000
  
  

• Roof repair: ~$2,200
  
  

The philosophy: “cheap and cheerful” → not cheap in quality, but solid, durable, modern-looking materials without overspending.

What Are the Returns After Renovations?

Renovations pay off in long-term cash flow. Examples from different guests:

• $275,000 purchase + $92,000 in renovations → converted to 5BR/3BA, net cash flow ~$20,143/year (20% cash-on-cash).
  
  

• Another property converted into 10-resident co-living → $50,000/month gross income with ~$13,000/month net cash flow after expenses.
  
  

Key Insights from Our Guests

• Quality materials = fewer turnovers → durable flooring + solid finishes save money long-term.
  
  

• Bathrooms add speed, not rent → Section 8 may not pay more, but families lease faster with extra bathrooms.
  
  

• Conversions create value → garage/basement rooms can add $1,600+ in rent per month.
  
  

• Budget wisely → plan $10K–$15K per bedroom, $7K per bathroom.
  
  

• Modern finishes attract better tenants → homes that look clean and livable bring stability + stronger returns.
  
  

Best Quotes from the Podcast

“Section 8 doesn’t pay you more for two bathrooms, but they rent a lot quicker if they have another toilet.”

“The better you take care of the property, the less money it’s going to cost you in the long run.”

“I really like going after the 20 mil vinyl flooring. It’s going to last you 25 years.”

“Cheap and cheerful doesn’t mean cheap stuff. It means moderate but solid materials.

Why This Matters for Affordable Housing

Renovating rentals is about more than increasing property value—it’s about providing dignity in housing. Durable, attractive homes attract tenants who stay longer, care for the property, and help stabilize communities.

The Affordable Housing & Real Estate Investing Podcast, hosted by Kent Fai He , brings together the best insights from developers, investors, and advocates across the country to share what’s working in affordable housing.

DM me @kentfaihe on IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.