We purchased a home in Charlotte for our daughter and her roommates. She will graduate in three years, so we expect to own the home for at least that long. The kitchen and bathrooms are okay, but need renovating before we sell it. We used a HELOC on our own home for the down payment. Our plan is to refinance the house in our daughter's name, as a first time homebuyer, for a better rate and terms. I think we should rehab the house now, before we refi, so we can get as much of our money back to put back into our HELOC. My husband thinks we should wait to rehab until we are going to sell it (because, college kids...). I am curious what more experienced investors would do?
If your goal is to refi and capture its highest ARV to pull the most amount of cash, rehab it now. Otherwise they are college kids, the house is going to see a lot of wear & tear.
Not all kids are the same. What type of person is your daughter and her friends? Will they take care of things or are they likely to have parties where things might get damaged? Be honest with yourself when answering the question.
If your goal is to refi and capture its highest ARV to pull the most amount of cash, rehab it now. Otherwise they are college kids, the house is going to see a lot of wear & tear.
Another option is you could do just a light rehab (paint walls, paint or just new doors on kitchen cabinets, new light fixtures, etc.). Those are all relatively quick and inexpensive but might spruce up the house for the refi. After the wear and tear of it being a rental (college kids or not) you can then redo the kitchen, bathroom, etc. before selling. The other benefit is you then don't run the risk of rehabing now and then the style becoming "dated" even in that short of a period of time.