Real Estate Broker · Dallas, TX · Member since 2014 · 156 posts · 20 votes
It's been a few months since I last updated. The 5 attached units (of 9 total) are finally ready to show. The other 4 will be a few more weeks. I have attached a before and after of the kitchen.
Unfortunately, as I suspected, the 950 sq. ft, 3/1 units are not getting the most positive feedback... "rooms are too small", "there's only one bathroom", "stairs are narrow", "construction is bad" (I am assuming they mean because I didn't completely replace the 1950's walls and trim).
Anyway, here's a "Before" and "After" of one of the kitchens. Hoping to have renters soon, possibly at a little lower rent than I anticipated considering the comments.
Carlsbad, CA · Member since 2010 · 1k+ posts · 1k+ votes
12y
Hi @Account Closed
You have done great job with the remodel. One thing I do is if the rooms are small is advertise a small 3 bedroom place as 2 bedroom unit, so when someone comes to look at it, they are pleasantly surprised with the extra room. When you advertise a small 3 bedroom unit, people who come to look at it usually have bigger families, but if you advertise it as a 2 bedroom, families can see themselves growing in the extra space.
Chicago, IL · Member since 2014 · 710 posts · 200 votes
12y
@Account Closed
Nice job on the rehab
Whenever I've had a small 3/1 I've advertised it as a 2Bd + Den and gotten good results. I think I would reset it and hold the price and see how your traffic is
Real Estate Broker · Dallas, TX · Member since 2014 · 156 posts · 20 votes
12y
These are all great suggestions. My property manager is insisting I don't lower the price yet. That's one of the reasons I like her.
Here are a few more pictures....(bathroom was not complete when this picture was taken... plumbing is now in). There is nothing "old' in the unit, except the walls and the layout. I have replaced everything.. tubs, toilets, cabinets, light fixtures, doors, flooring, windows, faucets, etc.
2" faux wood blinds should be in soon. I was trying to show with windows open because the windows are brand new and I think they look nice.
Popcorn ceilings have been scraped. Some of the texture, which doesn't show in these pictures is not so great in places, but the contractor repaired 90% of the bad places. Attic entry holes look old still because they are all different sizes and are just an opening with a painted board.
The layout is not the greatest. 1 small bathroom down stairs, main bedroom downstairs (see picture) is through the laundry room. This was an addition done in the 90's and there wasn't really an inexpensive way for me to change the walk-thru. It's a good sized bedroom with a huge walk in closet. Just not an ideal layout. I could add a door near the bottom of the stairs, but it's cinder block wall and I was trying to avoid cutting into it.
Real Estate Broker · Dallas, TX · Member since 2014 · 156 posts · 20 votes
12y
@Colleen F. I actually sent over an email last night to the property manager to change the listing from "completely remodeled" to "updated town home with 1950's charm and modern conveniences". I also told them to put something in the notes about how narrow the staircase is and that possibly only IKEA furniture would fit upstairs because it could be assembled in place. Heck, I might even furnish the upstairs with a few twin beds and a dresser and desk.
Real Estate Broker · Dallas, TX · Member since 2014 · 156 posts · 20 votes
12y
one very comparable, but even smaller 2/1, 820 sq. ft home, just recently rented nearby for $950 per month (was listed at $899, so must have had multiple offers). It has a carport, and mine don't, but didn't list granite or any major updates except carpet and paint.
That's the lowest. A few 1/1s last year at $750 and $800 and a 2/2 for $975. Everything else jumps to $1200 and up for the most recent rentals in the 1950-1960 aged homes. Only one or two with granite and major upgrades.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
12y
In my area, tenants don't seem to worry about granite, but they are willing to pay extra rent for off street parking. Again, it might differ for your area.
Since you just noted that the unit size if the one just settled was smaller, size might not be the issue. The layout might. How close is that just rented place to yours? Is that one part of a small apt complex like yours?
Real Estate Broker · Dallas, TX · Member since 2014 · 156 posts · 20 votes
12y
@Steve Babiak no the comp is a single family. We don't have apartment complexes in the area. Just the brand new town homes that back to my property, which is a huge complex, but not really comparable because they are new with garages and over $1200 per month for 2 and 3 bedrooms. They don't have granite or wood floors either. Just your basic carpet and tile.
I'm sure I just need to be patient. If I need to knock $20 to $50 or even $100 off the rental, I still have room for a good return on my investment.
@Eddie T. my contractor did a good job on price for me... but remember I have 9 units plus exterior, so it was a BIG project for him. He's slower than I wanted and a little aggressive on his draw schedule (which I have held back on for the last few weeks because of a lack of progress).
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
12y
I would agree with @George P. on making 2 larger rooms instead of 3 smaller rooms but the kitchen looks great and you should have no trouble after light staging. I did that with our SFRs - we put in a kitchen table with tablecloth, several fake plants and used those Glad plug-ins to make it smell "homey". Vanilla is always good. We also include blinds for all the windows and verticals for the sliders in all our properties. It makes it look like the tenant has less to do after they move in.
Dallas, TX · Member since 2011 · 308 posts · 59 votes
12y
Nice job! I'm curious as to why you went with such a high end kitchen remodel (granite, ss)? Generally I'd think at those price points it's not the norm (?) but I don't know the market up there too well.
Also I don't mean to toot my own horn but here's what I posted in your old thread http://www.biggerpockets.com/forums/432/topics/107712-what-to-do-with-small-three-bedroom-units:
Taking a quick look at lease comps I think your estimate of 900-950 may be a bit aggressive.
The comps I saw were on Legends Dr. That subdivision it seems was built in 05-06. A typical 3/2.5/2 rents for around $1250. Yours being a small 3/1/0 or 2/1/0 on a main road, I would use 750-800 for analysis purposes. If you can get more, great, but there aren't (m)any like comps so I'd be conservative.
How long has it been on market? Your pm seems to be pricing it at the very top of the market. You probably eventually could get it rented but it might take a while and you may be faced with turnover in a year. I would drop it to 850-875 and try to get some cash coming in asap.
The road is a main road but it's not real busy and the property is surrounded by trees and shrubs so it's pretty private.
I went with the granite because the price difference was only a few hundred bucks and some of the apartments I previewed had granite and wood floors. Plus I figured it will last longer than laminate counters.
It's only been on the market 5 days and I've had about 10 showings.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
12y
@Account Closed
Nice to see the follow-on to your purchase thread. The kitchen looks great ... especially when amount you spent. Good return on that one.
I may have mentioned this before, we have a similar property - small duplex that was being rented as a 4-bdrm when we bought it (smallest room was 9 x 7.25). We immediately started renting it as a 3 + 1 room and describe the +1 as suitable for an office, nursery, or one amazing walk-in closet.
We didn't lower the rent from what was being asked for 4-bdrms and it rents just fine.
Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
12y
You did nice work, looks good. Check out comparable rents with https://www.rentometer.com/, so you where you stand, and for clean, nice places, no reason to not be near the top of the gauge for your area...
Real Estate Broker · Dallas, TX · Member since 2014 · 156 posts · 20 votes
12y
@Eddie T. I know, I need to wait a bit on lowering the price. All of this talk started because I am getting negative feedback on the construction and the size of the rooms and the narrow staircase, which turned into a discussion about price, which usually can overcome most obstacles.
@Roy N. The rooms are not really that small, they just appear small because of the slant of the roof. The rooms are actually 9 X 16 but with the slant of the roof, maybe 2 feet on each side is not usable space, making them actually closer to 9 X 12. It's the staircase that's the biggest issue. It's narrow and makes a sharp turn. I have attached a picture of the outside so you can see the roof line and the lovely 1950's construction. I even put a "before". I probably went a little too smurf blue but I had to pick a color that was on the town's list of historic colors and didn't have a lot of choices. I alternated gray and blue to separate the units from each other.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
12y
@Account Closed
Now I recall the staircase discussion. We have a property with a third-floor loft serviced by a narrow twisted staircase. We ended up purchasing a nice Ikea bedroom suite for that space, bringing the boxes in via the window and assembling everything in-place.
Investor · Dallas, TX · Member since 2013 · 619 posts · 128 votes
12y
@Account Closed
Congrats on the rehab looks good indeed!
I consider rentometer a good start but it is too generic when comparing X number of bedroom properties, you definitely need to take in account the details like sq ft, number of bathrooms, is there an enclosed garage, are there extra living areas, loft area, etc. to determine true market rents
Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
12y
Originally posted by @Account Closed:
@Christopher Winkler here is what my rentometer analysis looks like. When you talk about "top of the gauge", do you mean top of the green bar?
Since most in the area are between $900 & $1400, maybe try a $100 or $150 higher and see what happens. Its a beautiful rehab and compared to most, you should be able to get top dollar. Just say way from the red unless there are situations that demand it. Start @ $1150 and see what happens, you can always go down, though its hard to go up! Even $100 more a month is $1200 in your pocket...
Dallas, TX · Member since 2011 · 308 posts · 59 votes
12y
The exterior looks really nice. I would give it another week or so and adjust accordingly. 5 days isn't much but then again I'd expect at least a couple applicants out of 10 showings.
It's hard to tell from the pics but the stairs don't look too bad. I have a 4-plex that looks similar and the tenants have no problem getting beds up there.
Real Estate Broker · Dallas, TX · Member since 2014 · 156 posts · 20 votes
12y
@Bryce Y. The stairs just have a really low ceiling around the turn. I would imagine some furniture has to fit because the downstairs bedroom is an add-on from the 90s. In the 50s the units only had the two upstairs bedrooms.
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
12y
@Account Closed
Take one of your units as a pilot. Furnish {at least one of} the upper bedrooms with a sturdy, classic to modern, but not overly expensive bedroom set. But a double bed in one (unless a Queen would fit) and in the other put a futon or day bed and add desk (gear to be s student's room/home office).
Then do not lower your rent ... maybe raise it a tad and see where you land.
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
12y
The rehab looks great! I will say, with a reposition, the important thing is to get it rented to good people, not necessarily maximize rents (unless you intend to flip it). Once it's mostly rented, then you can start slowly but surely pushing the rents up.
Involved In Real Estate · Harwich, MA · Member since 2013 · 27 posts · 10 votes
12y
Renovation looks great! On the exterior, I think if you stained the square beds and put some small evergreens in there it would really make all of the other renovations pop. I like the idea of staging one unit and if you do don't forget about the outside! A doormat, something on the door, and maybe a window box with some flowers as well. GL
Real Estate Investor · austin, TX · Member since 2014 · 57 posts · 7 votes
12y
Kim,
The renovations look wonderful. I am proud of you. I'm sure you'll get some renters soon. Perhaps wait until the end of August when the students come back from vacation?