Archive | June, 2012

Repair or Replace a Rental Property Appliance?

29 Jun

A Failing Fridge
Our tenant mentioned her refrigerator seal needed to be replaced…

Me: *opens door* Where is your refrigerator door shelving?

Tenant: We’ve never had any.  Also, the crisper doors pop off if you put anything in them.

Me: That is a problem…

Tenant: The ice maker stopped working a long time ago.  We told the previous owner, but they wanted to know how often we really used ice.

Bless her heart. The sticker inside told me I had a 1999 “Tappan” brand refrigerator and gave me a model number.

Option 1: Repairing with Replacement Parts
Lessons Learned: (1) is awesome for replacement parts and (2) replacement parts aren’t cheap:

  • 2 Crisper Drawers – $249.06
  • 2 Door Shelves & Brackets – $91.96
  • 1 New Fridge Seal – $68.80
  • 1 New Ice Maker – $69.37

I had to wonder whether it was worth it to sink $480 + shipping into a 13 year old off-brand refrigerator.

Option 2: Replacing with a New or “New” Fridge
I considered several replacement options:

New & Improved Refrigerator!

  • Scratch-and-Dent: offering new-but-blemished appliances for a discounted price. I suspect there is a greater discount for the higher end appliances, but I was unimpressed at the cost of white, top freezer refrigerators.
  • Used: there were some real possibilities here – a bit less than the cost of the repair, but buying a somewhat newer unit instead. You need a bit of luck to find a unit you want in stock (several were already missing shelves and drawers). For the real estate investor who wants to maximize profit, I would definitely recommend.
  • New: I was lucky that the current refrigerator was still operational so I could wait a couple weeks until the 4th of July sales began.  After referencing Consumer Reports, I price-shopped the least expensive ‘Best Buy’ rated refrigerator at a variety of big box stores.

Another consideration – our personal landlording strategy  to sacrifice some profit for reduced hassle.  In the end we bought a new Frigidaire with free delivery and a free ice maker for $495 + tax.  Score!

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