I just got what seems like an abnormally high estimate of 10k to touch up each unit in a multi-unit complex when renters move out.
For background the building is in Columbus, Ohio and each unit is a 3bed approx 850 square feet. The goal is to bring rent from 675 to 750 and eventually 800/month.
I was thinking a normal amount to touch up a unit after someone moves out should be 500-1k (about what a security deposit is). To upgrade and make the unit nicer would be a couple grand, maybe 3k.
Am I way off on my estimates?
All depends what "touch up" means. Figure out a task list, determine material cost, and estimate labor to determine what is fair or not. If you have pics and can walk us through what your thinking we can help you better.
figured I wasn't being specific enough, but am I in line with costs to just clean and make ready for next tenant (500-1k)?
From there, if we were to add value to increase rent, thoughts were to change out the flooring (add tile), update the kitchen cabinets and countertops. And a fresh coat of paint.
@Francis Rusnak Just food for thought. $75 rental gain x 4 units = $300 a month. 300 x 12 =$3,600 annual.
$3,600/ $10,000 = 36% return on your investment to bump rents. Most people like a 36% return...
@Francis Rusnak Sorry I'm not sure why I thought you said 4 units above, if it is for one unit, maybe the general condition was much worse than you originally thought?
maybe I wasn't clear but it's estimated at 10k per unit and 8 units. Won't rehab until each of the units are vacant.
@Francis Rusnak It's hard to us to answer without seeing the unit condition but 10k a unit seems VERY high to me, I can upgrade a unit that size for less than 5k.
What exactly does the contractor want to do for 10k? Are you going to refurbish the Kitchen and bathrooms? Are you going to repaint the interiors and install new flooring? Is there plumbing or electrical repairs anticipated
Agree with Samantha above. In this part of the world you should be able to update that size unit for around 5k or less /- appliances.
I'd say I would pay is $500/$1000 to clean and touch-up unit after a tenant vacates (clean carpets, touch up paint, maybe replace a faucet that's been leaky). 10k seems way out of line.
However if your expectation is to get new cabinets/counters/tile/paint installed for 3k, I think that's a bit optimistic. Paint alone is $1/sq ft. and if you need 2 coats, double that. Let's just say $1,000 for labor and material. Typically, tile is $3-$4 installed, so that's another $2-3k (assuming you're doing it in the whole house, adjust if not). Then you've got cabinet and counter top cost + labor, plus any miscellaneous items along the way (again, faucets, sinks, garbage disposal, etc.).
For those saying they could get the above done for 3k (or even 5k), I'd love your contractor information. I've rehabbed 15+ houses in Columbus and I think he's looking at a 5k minimum, 7k being more realistic.
Now, do the work yourself? Sure! 1-2k worth of work. I know you can't though since you're in Vegas!
$500 - $1000 to turnover an 800sf unit is way too rich for my blood. That's a lot of cash if you're in the $200 dollar a door club..
You used satin paint so the walls are easily washable. You paid a cleaning service 100 bucks to scrub the whole place down and charged the tenant back 40 bucks because they never clean the stove. If needed you replaced those janky mini-blinds for 5 bucks each from Lowes, and if you (still) have carpet you found a random coupon from Savor Gator or some such for cleaning.
You need to define your "scope of work" better. So... $10k / 850 sf = $11.70 per sf cost. This should get you all the walls, ceilings, doors and trim painted and carpet replaced. Is this what you are after? If so, then the price seems reasonable but maybe a tad high by $2 - $3 per sf.
I spent $8,000 to redo a 950 sf apartment. I was able to raise the rent from $900 to $1450, granted this is extreme and not due to only the physical improvement. Work, most notably involved extensive replastering as many walls were badly cracked. Apartment was completely repainted, new luxury vinyl woodgrain flooring put in throughout, window repairs, new light fixtures and other electrical repairs, new refrigerator. New interior doors were installed.
appreciate all the input basing it off of vague information. I'm working remotely and just got a rough estimate coming to me from a third party (real estate agent) who was with the potential prop manager. No work order was done and if my offer goes through then I'll be flying out for personal inspection.
For $75 extra a month I would not drop $10,000 unless you cannot rent them in their current condition at the current rent rate. It would take you 11 Years to recoup the investment, and over those 11 years most of the products installed would need to be replaced again, or maybe sooner even. If you think you could do new floors, maybe just re-paint cabinets, new hardware on cabinets for the $5,000 range, and still get the $750 + you wanted, that might make more sense. Especially if you are looking to reposition the property and sell in 3-5 years.
Using my 6-plex move-out numbers, I get a vacancy showible for about $1000-1500 and if I have to replace rugs, add another $900-1200
If you are going to do a lot of this, create a standard rehab finish "package" for bathrooms, kitchens, and other rooms and price it out. Then reduce it to cost per square feet.
Then when you go into a place, all you have to do is measure the appropriate room, do the math, and you'll have your number.
10k is way to high. In california. You can do remodel kitchen with new cabinets in a small apt with face lift for bathroom for 10k.
@Francis Rusnak adding my 2 cents worth to this conversation. We've purchased a 12 unit here in CMH that the owner hadn't kept up with maint. Not crazy bad, but none the less, all units need attention. We (read our PM) has been fixing up the units into their paint scheme and setup. We asked that they put in allure in the living areas and keep carpet in the bedrooms. So for the last unit that turned over to get it into spec it cost close to $8500. That's total repainting, allure downstairs in the kitchen, living room and 1/2 bath, and allure in the upstairs bathroom. New carpet on the steps and in the 2 bedrooms. A new bedroom window, vanity's, assorted door knobs etc...
For that $8500 investment rents were able to be raised from about $520 to $700.
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