PLEASE ADVISE ON EXPERIENCE - RENTAL TIPS NEEDED

[Jean-francois Ndomb]

Hey BP family,

I am acquiring a 4 unit at a discounted price ( and yes, I did the numbers, Cash-flow, Cash-on-cash ROI, Cap Rate above 7% and planned for all expenses with the Rental Property Calculator and tips from @Natali Morris Podcast 165) and I am still cash-flowing about $400/mo. But I need to do some minor work to the property so that I am in good standings with the upkeep from when I get it moving forward. The flooring currently has some thin ( prob cheapest ) carpet that ripped off rather easily. The unit I will occupy is empty right now and I requested it not to be filled since I will move in for the first year to take full advantage of the FHA financing ( I will still pay rent to myself to keep my finances and numbers on track).

Do you guy find carpet in rental more cost effective than Laminate flooring? The traffic is not that heavy in the units since they are 1br/1bath/1kitchen, 550sqft units. The weather in Michigan would also factor in I'd guess, we get a little more snow than most places and the property is on a lake shore pretty much. 

Also, the old owner had the utilities all included, and I am not a big fan of that. What cost effective splitting strategies would you guys recommend?

Thank in advance for all your help.

Yours in success,

JF

[Account Closed]

@Jean-francois Ndomb I personally don't like carpet, although I do have units with carpet.  For the past couple of years when flooring needs to be replaced I have been using Allure vinyl plank flooring - you can get it at Home Depot.  There are different styles to choose from and its under $2 a sq ft out the door.  This is a rubber backed "floating" floor so it is not glued down.  It is easy to install so you can do it yourself to save money.  This flooring looks nice and will last a lot longer than carpet.  

Splitting utilities can be difficult.  For heat you would have to have 4 separate furnaces with ducting installed.  For water you would have to have 4 water heaters and make sure all of the water lines were ran properly - all of that would be very expensive.  Electric should not be too difficult to split though.  When I started I preferred utilities to be split too.  At this point, I honestly don't mind having all utilities included.  I just charge more rent.  In Michigan, we estimate that including all utilities runs $100-$150 per unit per month (obviously this varies based on the size of the units) so I will rent a $500 a month apartment for $650 with utilities included.  You can do your own utility analysis on your property to see what your average is per unit.  

I have also found that a lot of tenants like having utilities included in rent, so they only have to worry about paying one bill (especially in Michigan - tell prospective tenants that they won't have a heat bill and they'll get excited about your building).