Metairie Market & New Construction Question
Good day, all!
I have a question regarding a home I own in Metairie, LA 70001, in Jefferson Parish just outside New Orleans (sorry, just trying to hit everyone's potential keywords!).
This home (2BD, 1BA) is currently rented out for $900 monthly, and tenants are in place until the end of July. The home was built in 1955 and was willed to me by my grandmother so I now own it free & clear. Once the tenants move out there will be a ton of work to get it back to rentability (new HVAC is needed, plus a decent amount of cosmetic rehab - perhaps $10K when factoring in all of this). The money aspect is not really a concern, beyond just making sure that I am making a prudent financial decision overall.
I have talked to my Property Manager & RE Agent in the area, and my concerns are as follows:
- Though we may be able to raise rents for new tenants, the potential $10K upfront cost is a little off-putting for the rental rate. A new yearlong lease would basically be paying myself back for these costs.
- I do not live in the area and have been considering selling the property, which makes putting the money into the property an unattractive proposition since I'd have to hold onto it longer and see out another lease just to break even on these repairs.
- My RE Agent tells me that if I were to just sell the property "As-Is" once the current tenants move out (without installing the HVAC or making other repairs), that the property is likely a tear-down for a potential developer, and that he would put it on the market for $70K-$80K. He also tells me that if I DO make these repairs that we should be able to sell it to someone who will be interested in keeping the existing home (first-time homebuyer, or buy-and-hold investor) in the $105K-$115K range. After doing my own research and due diligence however, I am not convinced that this property is anything more than a tear-down REGARDLESS of what I do to the property, unless we're talking total gut rehab (and even then, I'm not sure the cost of that project would yield beneficial returns).
- If this property is nothing more than a tear-down for a developer, then I'd almost rather do that myself. I have the funds (if not the experience) for a project like this, but would really like to connect with some of my extended BP brethren in the area to hash out some potential options before doing anything rash.
So this is a long-winded way of reaching out to BP members who are familiar with this marketplace and might be able to offer some advice or guidance moving forward. If you are an investor in the area with some new construction experience, or if you know of anyone that you can point me towards that does, it would be greatly appreciated!!!