rental property blueprint

hi everybody this is my first week posting on this site and i love it. i own 4 townhouses(row homes) in camden nj for about 5 years now, and i like for all of them to have hardwood floors, carpet in bedrooms, and tile in kitchens. i recently upgraded a kitchen with over range microwave and a dishwasher, something you don't usually find in city row homes is that too much? how much is too much? i'm trying to position myself for a future sale, but don't want to go overboard. does anybody use a different blueprint?

Mark Updegraff

Multi-family Investor · Rochester, New York

Donor

858 posts
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Jul 05 '10, 11:32 PM

IMO - It depends on how much you are getting for rent, and if you could get enough more after doing the renovations to not reduce your cash flow.

Things to consider:
How long until you sell?
If you have some time left, try to do things as you go.

Carpets will be trashed by tenants, so keep those in place as long as possible before changing.

Hardwoods will need maintenance every few years. With my experience, Tenants do not take good care of the wood floors. They are better than carpet, but they will scratch them, and they will not wax or use any minwax, etc.

I would keep the rental nice, but on a very tight budget, no need to spend tons of money to watch it get trashed. I would even consider holding off on the renovations until you are ready to sell. That way the place looks pristine when it is on the market.

Cheers!

Dale Osborn

Mobile Home Investor · Spanaway, Washington

1,307 posts
16 awards
61 influence

Jul 06 '10, 12:21 AM

If you over improve the property for the neighborhood you are in, you will never recoup your costs involved in upgrading the property. When you have it for sale they will look at comps for your area. These prices will determine what you can sell your property for. If you have a diamond sitting in a coal field - it will have to sell at the coal price.

Mike D.

Real Estate Investor · New Jersey

71 posts
1 award
50 influence

Jul 06 '10, 12:39 AM

Hey Michael,

I'm also from nj. I know camden is a rough city. What as your experience been there? Are you planning a future sale bc you don't wish to stay in that market?

Michael S.

Residential Real Estate Agent · Camden, New Jersey

126 posts
4 awards
50 influence

Jul 06 '10, 02:00 AM

i think camden is great, in todays market you can buy a house for 30k (move-in!)and rent it out for $950-$1000 a month, so far the average stay for my tenants is two years. i bought my rentals during peak market, but i paid below market price in good areas, so right now i'm "not under water" in fact some areas in camden comps are higher than in '08. i plan on buying 2 more, and probably pay cash this time.

Michael Rossi

Real Estate Investor · Ohio

4,587 posts
14 awards
56 influence

Jul 06 '10, 02:51 AM

If you can buy for $30K and get $1,000 per month in rent - WHY WOULD YOU EVER SELL? I would buy 50 more; quit your day job; and enjoy life!

Having said that, if you want to sell, then I certainly would NOT upgrade until you're ready to sell. If you've already got tenants paying market rents and they're staying 2 years, then why upgrade now. If you upgrade now, you'll just have to do it again before you sell (after the tenants tear up the upgrades). So, wait until you're ready to sell to do any upgrades/cosmetics.

Steve Babiak

Real Estate Investor · Audubon, Pennsylvania

4,267 posts
14 awards
91 influence

Jul 06 '10, 05:23 AM

Are you talking about the same CAMDEN, NJ as is directly across the bridge from Phila., PA? If so, why would you even consider putting higher end finishes in the low-end of housing?

It might make sense if the finish you use is more durable than what had been there, so that you gain longevity as the trade off for price. But the simplest rule is to be competitive in finish and condition with the other rentals in your area, so that your place is just as desirable. If you go overboard in your choice of finishes, there is no guarantee you will get that back in higher rents.

Michael S.

Residential Real Estate Agent · Camden, New Jersey

126 posts
4 awards
50 influence

Jul 06 '10, 06:05 AM

yes the same Camden, there is violence there .but people need a place to live, and are willing to pay for it. my places are above the bar, and when a potential tenant enters one they want it! this gives me more applicants to choose from. when neighbors or friends find out one of my houses is about to become vacant i get calls before it becomes available. i have one house in a very bad section of town, but once you walk in you tend to forget about it...even though the police and federal agents raided it one day looking for my tenants boyfriend for bank robbery, i guess that explains the 3k he gave me in the basement for back rent!
as far as higher end finishes...stuff from craigslist is considered top of the line in camden 2 to 3 years old. i do all work myself.

Mike D.

Real Estate Investor · New Jersey

71 posts
1 award
50 influence

Jul 06 '10, 07:28 AM

Good for you! For someone like you who is willing to invest in an area like Camden, I'm sure there is plenty of money to be made. Personally, I think I've heard too many stories to feel comfortable there. Do you ever feel threatened?

Michael S.

Residential Real Estate Agent · Camden, New Jersey

126 posts
4 awards
50 influence

Jul 06 '10, 07:58 AM

no. i don't feel threatened, i'm there to do business just like verizon, pseg etc...you got to use local law enforcement if there are issues or it will escalate. i got to know some of the local state troopers in the area and that helps alot. if or when camden turns around i want to be there cashing in...