KC 4-Plex: Pushing Rent to "Match" Neighbors vs. Triggering a $10k renovation

[Xuming Yu]

Hi everyone, I recently purchased a 4-plex in Kansas City and I’m navigating my first set of renewals. I have a significant rent gap between units in similar "poor" condition.

The Data:

• Market Rent: $ 1200 - 1350 (for fully renovated units).
• Unit A: $810 (Current).
• Unit B: $940 + $50 pet rent (Current).
• Strategy: I offered Unit B a 5% increase. I want to bring Unit A up to $940 to match Unit B’s base rate.

The Risk:
The building has deferred maintenance (siding and roof issues) that no immediate attention needed but they are heading to the end of their useable life and I’m planning to address "as I go" since everything is currently functional. However, if Unit A rejects the $130 increase and moves out, I’ll be forced to spend roughly $10k on an interior renovation to hit the market rate. While the ROI on a $10k flip to gain $400-500/month is great, I'm trying to balance my capital reserves while dealing with the exterior deferred maintenance.

Questions for the community:

1. 1. Would you push Unit A to match Unit B even if the condition is poor, or take a smaller win (5%) to avoid a turnover while the exterior still needs work?
2. 2. In the KC market, how are tenants reacting to "catch-up" increases (15%+) on unrenovated units?
3. 3. Should I prioritize the interior Reno now to maximize cash flow, or keep the "low rent" tenant as-is to preserve cash for the roof/siding?

[Drew Sygit]

Quote from @Xuming Yu:

Hi everyone, I recently purchased a 4-plex in Kansas City and I’m navigating my first set of renewals. I have a significant rent gap between units in similar "poor" condition.

The Data:

• Market Rent: $ 1200 - 1350 (for fully renovated units).
• Unit A: $810 (Current).
• Unit B: $940 + $50 pet rent (Current).
• Strategy: I offered Unit B a 5% increase. I want to bring Unit A up to $940 to match Unit B’s base rate.

The Risk:
The building has deferred maintenance (siding and roof issues) that no immediate attention needed but they are heading to the end of their useable life and I’m planning to address "as I go" since everything is currently functional. However, if Unit A rejects the $130 increase and moves out, I’ll be forced to spend roughly $10k on an interior renovation to hit the market rate. While the ROI on a $10k flip to gain $400-500/month is great, I'm trying to balance my capital reserves while dealing with the exterior deferred maintenance.

Questions for the community:

1. 1. Would you push Unit A to match Unit B even if the condition is poor, or take a smaller win (5%) to avoid a turnover while the exterior still needs work?
2. 2. In the KC market, how are tenants reacting to "catch-up" increases (15%+) on unrenovated units?
3. 3. Should I prioritize the interior Reno now to maximize cash flow, or keep the "low rent" tenant as-is to preserve cash for the roof/siding?

 Point out to tenant A how much market rents are and just ask what increase they think is fair.
- Often, they may give an acceptable amount.
- Or they complain they are max'd out or complain about the property condition.

Roof & siding don't really affect rental demand, so put those off as long as possible.

What interior improvements can you make while the property is occupied?
- We've had tenants volunteer to stay with friends while we redo a kitchen or bath.