Ever since I bought one of my duplexes, I always felt window replacement needed to be done. It's in a Class C neighborhood, so there's no expectation of luxury here, but the windows on this property were old and inefficient. I can confidently say that ANY kind of new windows would be a major improvement on this property.
I held off on replacing these windows for years because from a cash flow standpoint, it was hard to justify spending over $10K for it without any concrete expectations of when (if ever) I could get that money back.
Then I figured it would be a good opportunity to make a substantial improvement to this property (for the sake of my current and future tenants) while bringing YOU along for the ride. Here, I want you to see the transformation, hear about my experience along the way and, ultimately, decide for yourself whether this kind of upgrade is worth the investment at YOUR piece of real estate.
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Working With Window World
There are many different brands when it comes to windows. I knew that depending on which types of windows (and contractors) I chose, there was a wide price range I could be paying for them.
So I decided to work with a company called Window World.
I've had good experiences with other window companies in the past, but there are a few reasons why I chose Window World for this project:
- Window World is essentially a one-stop-shop for windows. They don't just sell you a window; they'll handle every aspect of the process—from measuring, pricing, and manufacturing to installation. They also measure, install, and sell exterior doors.
- Window World is a nationwide company. Many similar window companies operate only in my state, but I wanted this information to be relevant to as many people as possible. That's why I picked a company with a presence in most major markets around the U.S.
- Window World has a lifetime transferrable warranty on all windows. This is actually pretty standard among window companies these days, but I feel like Window World makes it easier than most. Since their installers are actually employed by Window World (not sub-contracted with a third-party installer), they handle the warranty fulfillment directly rather than leaving the customer to figure out the installation on their own.
- Window World is an ideal choice for lower-priced windows. Being a rental property, I wasn't looking for a “Cadillac” of windows, but more like the “Chevrolet.” They didn't need to be state-of-the-art—just up to today's design and efficiency standards and built to last.
- Window World operates as kind of a franchise. Each shop is essentially selling the same product, under the same brand, and sourced from the same plant, but each office is independently owned and -operated.
My Experience: Before and After
My duplex in question is located in Grand Rapids, Michigan, and the windows that went into my duplex were built and assembled in Gratz, Pennsylvania. So the product wasn't manufactured in my state, but it was made in the USA. All told, the total time from ordering to installation was eight weeks.
This particular property is over 100 years old, so there were a few extra challenges and costs associated with the installation.
The installation team consisted of one person, so the entire installation process took a total of three days. This was partially due to the presence of lead-based paint and the fact that he was working in two separate rental units with tenants that weren't always responsive.
As you can see from the video above, the end product was a MAJOR improvement from what came with the property when I first acquired it.
Does It Make Financial Sense?
So obviously, new windows are a lovely upgrade to give yourself at your primary residence because you get to see and use them every day. The value proposition goes beyond mere dollars and cents; there's your own personal comfort and enjoyment to weigh into the equation too.
When it comes to income-producing property, the decision is usually much more weighted toward the cost and return. Most real estate investors look at this decision purely from the standpoint of cash flow and whether the ends justify the means.
This was easily my biggest dilemma in making this decision.
Looking purely at how positively (or negatively) this would affect my cash flow, there wasn't much of an upside to this decision. AT MOST, I might be able to increase rent anywhere from $25-$50 per month (if at all). So no matter what, it would take many years for me to recoup this cost.
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As such, unless new windows are an ABSOLUTE necessity (e.g., if the windows are broken or don't meet the city code), it's pretty easy for most landlords to just say “no” to this kind of investment.
However, there are other benefits beyond cash flow that may be worth considering. Here's the full list of pros and cons I came up with.
Pros of Window Replacement:
- In theory, new windows can increase the resale value of a property. See the latest Cost vs. Value Report in your market.
- Better windows almost always add significant energy savings, which ultimately saves money for whoever is paying the heating/cooling bill.
- Improved windows will make a property more desirable, which could give a landlord better options for tenants.
- New windows may allow a landlord to charge a higher rent price (depending on the property, the market, and the level of improvement).
- If a landlord wants to provide a higher quality of housing and feel good about what they're offering in the market, new windows are a great way to improve the tenant's living experience.
Cons of Window Replacement:
- New windows are CRAZY expensive, no matter what kind you buy or who installs them. There's just no way around this, and it's a tough pill to swallow.
- Replacing windows is a hassle. If you've got tenants in your property, they need to be notified, they need to move all their furniture away from the exterior walls, and remove any hardware from the windows (which they may not agree to do).
Pricing vs. Value Analysis
Window World (and I suspect most window companies) has a few different quality and pricing levels. Their entry-level windows are the 2000 Series, which probably makes the most sense for rental property owners because they're the least expensive option.
For an extra $20 per window, I upgraded to the 4000 Series—and since I was only replacing 24 windows, it seemed like a worthwhile price to pay. If I was replacing 100+ windows in an apartment complex, I probably wouldn't have gone with this upgrade.
There's also the 6000 Series (a triple pane window, with the most efficiency and best build quality), which I would probably consider installing in my own home. I didn't think this was necessary on a rental property, however.
In the end, I was pretty happy with the new windows in this rental unit. The property looks a lot better (windows can make a surprising improvement on a property's aesthetic appearance), everyone at the company was very easy to work with, and I even got a discount when I informed them that this was a rental property.
But beyond all that—when I look at these new windows purely from a dollars and cents standpoint—was I able to justify the cost of this investment?
Given the cost of this project (approximately $11,000, after getting some landlord discounts), I would have to increase rent by $25 per month in both units and then collect this higher rent for 20 years (and then totally ignore the time value of money) in order to be “made whole” again.
In my situation, other than the “warm fuzzies” I got from seeing the improvements to the property, there weren't a lot of compelling reasons to do this from a cash flow standpoint.
Now, keep in mind—I'm not paying the heating/cooling bill at this property (so I have no cost savings there), and I'm also in a relatively cheap rental market (so there wasn't much room to increase rent). So, in a way, I had almost all the numbers working against me.
If you own rentals in a more expensive market and/or if you stand to save some money on the utility bills through the increased efficiency, then it should, in theory, be much easier to get on board with this kind of investment. In some instances, it can very realistically pay for itself.