After spending $250,000 to remodel his charming 1920s Venice cottage, the last thing Stefan Hammerschmidt wanted to see from his front windows was a modern stucco mansion.
But that's what he feared when a developer bought the small, bland bungalow across the street. "I was so upset that I could not sleep for a couple of days," said Hammerschmidt, a landscape architect.
So when the house fell out of escrow last spring, Hammerschmidt and a partner decided to buy it, spruce it up and rent it out. The $575,000 purchase and $54,800 renovation gave him control over the view from the front windows and would serve as an investment.
As a moneymaker, however, it is a long-term project. The house rented for $2,200 a month before the sale and it now brings in $2,700. When property taxes and insurance are considered, there is a $1,000 negative cash flow per month, although some of that is mitigated by tax benefits.
On the plus side, there are indications based on sales of other properties in the neighborhood that the house has already increased in value at least $100,000. And a landmark home on a double lot half a block away was recently listed for more than $2 million.
The modest house across the street from Hammerschmidt initially did not look like it was worth saving. A rental for 10 years, it was a bedraggled sight with a white-on-white paint scheme, a rotten roof and, most egregious to Hammerschmidt's eye, a chain-link fence. Inside, the carpeted living room and two bedrooms were plain, and the kitchen and one bathroom barely adequate.
When the sale was completed, the tenant stayed on until the lease expired in August, and then the 10-week remodel began.
Because Hammerschmidt sees the rental from his own windows, he wanted to look at something exciting. He was on vacation in the Caribbean when the house went up for sale, which may have influenced his choice of a tropical color scheme of bright lime green with dark purple trim. The colors were inspired by an orchid, and the same combination is found in a banana tree he planted out front and in a Brazilian coffee tree in back.
"It's a beautiful combination," Hammerschmidt said. The neighbors initially were taken aback by the bright green house but have come to accept its very Venice flair.
In addition to the vibrant color scheme, the chain link was replaced by a redwood fence with horizontal planks. A metal gate designed by Hammerschmidt and fabricated by a local artist has an image of a surfer riding a board.
Inside, Hammerschmidt resisted the impulse to fill the house with the bottom-rung products and cheap appliances that mark many rentals. He wanted well-made and durable materials that would cause him less stress as a landlord.
"I think it makes sense," he said. "We wanted to make sure that the tenant is not knocking on our door everyday telling us this or the other thing is not working or broke down."
Most important for Hammerschmidt was a new and gleaming kitchen. The old one was gutted and replaced with custom maple cabinets with backdrops of Italian glass tile and stainless steel appliances. To make the space more functional, he inserted a breakfast bar between the kitchen and living room and added French doors to a wooden deck out back.
Throughout, the carpeting was pulled up and red oak hardwood floors were installed. Hand-blown glass tiles now front the fireplace, and the bathroom has new fixtures and ceramic tiles.
A hint of rustic charm remains in the wooden window casings, which Hammerschmidt was in the process of sanding to repaint when he realized that each window had a different color patina that was quite attractive. So he opted for a clear finish rather than an opaque paint.
When the rental was advertised, at least 40 people showed up for the open house. Three hours later, it was leased.
The results have fulfilled his goals. Hammerschmidt had planted a screen of shrubs along his parkway several years ago to hide the white blight across the street. But that's no longer needed.
"Now I'm going to take all of that out," he said.
At a glance
Project: Purchase a two-bedroom, one-bathroom house and remodel it for a rental property.
House cost: $575,000
Remodel cost: $54,800
Duration: 10 weeks
Rent produced: $2,700 a month
Tile: Classic Tile & Flooring, Victor Hugo, Santa Monica, (310) 576-6200
Gate artwork: Claudio Banzer, Los Angeles, (323) 692-0602
Landscape design: Stefan Hammerschmidt, Venice, (310) 578-5012
Where the money went:
French doors ...$1,100
Framing labor ...$1,000
Kitchen appliances ...$4,500
Bathroom, fixtures ...$2,500
Tile installation ...$5,000
Maple cabinets ...$6,000
Window hardware ...$1,000
Redwood fence ...$2,700
Hardwood floors ...$2,500
*Amounts are approximate.
Kathy Price-Robinson is a freelance writer who has written about remodeling for 14 years. She can be reached at www.kathyprice.com.