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The Best Appliances for Rental Units

the best appliances for rental unitsWhen you’re searching for appliances to put in your rental units, you need to find reliable brands with easily replaceable parts. Additionally, you need something that’s common enough to easily repair.

Shop Wholesale Appliance Deals

Did you know that retailers like Lowe’s and Amazon provide wholesale pricing on appliances? If it’s time to upgrade appliances in multiple rental units, it’s worth taking a look at the kinds of discounts you can get by buying in bulk — and by purchasing sets. If you find the right fit, this could save you a lot of money that you can instead invest in your property in multiple other ways. 

Whirlpool and Frigidaire brands are the most readily available when it comes to wholesale models, and both are generally considered reliable brands. At any salesperson interaction in-person, always let them know that you’re open to a floor model in exchange for a discount. It’s possible the store will provide a 10 percent (or more) discount on a display model. Similarly, “open box” models in the back can net you a discount, too. 

Consider Space When Selecting Appliances

Especially if you own multiple rental units, it’s tempting to go with bulk purchases. However, it’s crucial to consider the size, space, and relative tenant expectations when selecting appliances. If you’re renting out a studio efficiency rental unit, for example, an efficiency washer-dryer combo unit that fits in a small closet will be considered ideal — and a good investment, as many studio apartments do not come with these appliances. 

Additionally, if you’re renting something high-end with an island, upgraded countertops, and plenty of space, the appliances you select need to be of higher quality. 

Consider Used Appliances

When homeowners upgrade appliances in their homes, they often wish to offload their gently-used appliances. Keep an eye out on sites like Craigslist and Facebook Marketplace for a good deal on used appliances, and see if your local mom-and-pop hardware store provides consignment appliances. Your tenant is already expecting a used appliance unless the unit is new construction, and as long as it is clean, functional, and up to standards, there’s nothing wrong with saving some money with used appliances. 

Select “Scratch and Dent” Appliances

You can also look for slightly damaged appliances at Sears Outlet (now known as American Freight) and stores like Best Buy. These items are functional, but contain cosmetic damage. They cost half as much as regular appliances. Sometimes, you can paint over the cosmetic damage. Try finding items with cosmetic damage in person, so you can inspect them there and do your best to negotiate for an even lower price. 

In most stores, these items are called “scratch and dent.” Sometimes you’ll get lucky and find an item that has minor cosmetic damage in a place that isn’t even visible — for example, a little dent on the side of the refrigerator that faces your wall. Often, scratch and dent items still come with a warranty, so your only risk is the inconvenience of having to possibly return it if something isn’t working right. 

If you aren’t picky about the finish of the product, you’ll have even more options to choose from when looking at scratch and dent appliances.

As with any damaged items, make sure you and the tenant mark them off on their move-in checklist to ensure fairness come move-out. 

Choose Appliances That Will Attract Tenants

Expectation has to meet reality if you want to fill vacancies, especially in a hot rental market. Consider selecting appliances that can really drive up the price of your unit and the competition for it. You’ll be pleasantly surprised at what you can find at your local CostCo or Menard’s — gone are the days when you have to head to a department store like Sears or even a big box store like Best Buy to get what you need to furnish a rental unit. 

Choose Energy-Efficient Appliances

Energy efficient appliances are winners for multiple reasons. Typically, your tenant is responsible for electricity. If you have electric appliances, they’ll be thrilled to learn that their costs are going to be less as a result of energy efficient appliances. Secondly, you can get a tax break as a business by purchasing energy efficient appliances. To avoid the markup on energy efficient products, do your research before heading to the store — some places will try to bundle your energy savings into a frustrating markup in product value. Look for the “Energy Star” logo as you shop.

Which Appliances Don’t You Need?

You are not required or expected to supply your tenants with every appliance. Especially in smaller units, washer and dryer units are desirable, but not always expected. (Depending on the unit, there may or may not even be a hookup for washers and dryers). If you don’t have central air, an air conditioning unit may not be mandatory, but be sure to let your tenant know the rules about installing in-window units, especially if you have an HOA with rules to abide by. 

Lastly, microwaves are the ultimate optional appliance. A small one can be pretty cheap, and you may as well consider it a write-off for the price. However, stoves with overhead microwaves set an expectation for a functioning microwave in the unit. If microwaves are counter space items, it’s hardly expected for you to supply ones. Lower income tenants will consider it a nice-to-have, and higher income tenants will consider the cost of supplying their own (if they don’t have one already) marginal. 

Consider the Maintenance

Especially when it comes to a dishwasher, consider the maintenance required with the unit, as that will likely fall on you or your property manager (who will of course charge you a servicing fee). Dishwashers that have self-cleaning filters are best as they require less maintenance (but cost more), whereas those without require more frequent maintenance calls. 

Lastly, there are tax incentives for upgrading your appliances in rental units. This change is current as of 2018, and permits a deduction. You no longer have to wait for depreciation and you can deduct them in a single year. 

When you create or edit your lease, make sure to include terms about your appliances in the lease: normal wear and tear vs. damage, responsibilities of maintenance, as well as any associated liabilities regarding appliances the tenant furnishes. You don’t want to be responsible for a faulty water hookup if they did it themselves, for example, and didn’t size or fit the appliance correctly. 

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