one two years later after doing A renovation in a B neighborhood

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one two years later after doing A renovation in a B neighborhood

Steven Maduro
Decatur, GA · Member since 2012 · 198 posts · 59 votes

Hello Bigger pockets

Back in 2012 I bought a Duplex in a B or C neighborhood

I did very upscale renovations

centering around fancy kitchen and bath faucets

floating vanities, water fall faucets, upscale lighting

laminate flooring

adding stack washer and dryer

and using design styled paint schemes such

as an accent wall.

or under cabinet lighting.

I was asked to report back after a year or two and here are my results

out of my two properties that have the extra doo dads

I have had little problem collecting rent. I have gotten pretty stable tenants that actually take care of the property.

my one property with just average amenities seems to be the opposite I cannot seem to get a proper paying tenant in there.

I am not saying there is a correlation just reporting facts.

my upscale items are purchased from closeout sales or odd lot

or on sale or clearance at Home Depot or Lowes

Many items I purchase from Amazon and save a lot there as well. I have to say that the overall reaction to my apartments is more than favorable and it definitely helps me not to have a vacancy too long.

My average vacancy has been 3 days from posting the unit. I believe offering the laundry center in the unit has been worth its price and cost to plumb and wire My tenants certainly appreciate not having to go to the Laundromat..

I have provided a quality of life upgrade. If I had it to do over again I would do it all again in a heartbeat. Offering more bang for the buck is just good business for my business model I have other landlord friends who do not agree even after my good reviews. However they have units that sit vacant longer. and tend to have more problems from the tenants they do have.

Just like I do from my one unit that has just average fixtures, faucets, layout and paint schemes.

I am happy to ereport back thank you to all the original respondents to the original thread.

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Bill S.Pro Member
Moderator
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
12y

@Steven Maduro I do some of what you did. One thing I don't buy for cheap is faucets. I want a tried and true model that I can find parts for. I buy nice ones, but not discontinued items. Try fixing a leaky faucet by looking for a discontinued $10 part that doesn't exist so now you have to buy another one. Go with the popular model and you only have to purchase one and it can be repaired for years in the future.

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  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y

    Congrats @Steven Maduro !

    I've done similar, not quite as much as you have with the under cabinet lighting and waterfall faucet ect. I had a bathroom in my most recent acquisition that needed a new shower stall and sub floor due to some rot. I could have probably gotten away with doing it for about $750 or so. Instead I did essentially a full redo on the bathroom and added a tub instead. That required moving a wall out a little and then all new drywall/durock, tile, toilet ect. That cost about $2500, so an additional $1750. But it looks nice and clean, whereas the other way it would have still felt old when I was done. I think, though I don't know as this property is a new area for me, it got me an additional $50-75/mo rent and a tenant that wants to stay for a long long time.

    So it is a 3 year pay off for the cost, but the intangible benefit of reduced vacancy/turnover and maintenance I believe will more than pay for itself in the next year or so.

    There is a balance to taking it up a notch versus over improving, but striking that balance will definitely payoff over the long term.

    1Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    12y

    Was this link the original topic you were referring to?

    http://www.biggerpockets.com/forums/52/topics/78359-all-of-my-fancy-renovations-payed-off-but-one-in-particular-sealed-it

    0Reply
  • Leslie A.
    Real Estate Investor · Houston, TX · Member since 2010 · 499 posts · 206 votes
    12y

    Thanks for the update on this. Interesting info.

    Can you tell us about how much extra money you spent beyond what you would have normally done?

    0Reply
  • Leslie A.
    Real Estate Investor · Houston, TX · Member since 2010 · 499 posts · 206 votes
    12y

    Thanks for the update on this. Interesting info.

    Can you tell us about how much extra money you spent beyond what you would have normally done? Sorry, I just read original post where you outlined the costs.

    0Reply
  • Steven Maduro
    OP
    Decatur, GA · Member since 2012 · 198 posts · 59 votes
    12y

    Hard to say exactly
    Leslie If you look below you will see it was smart shopping that helped.

    the faucets cost not much more than regular because I sought out clearance and odd lot dealers, goose neck faucet 129 water fall faucet 39 from amazon

    rainfall shower head 39 from amazon

    I spent 900 for both laundry center functionality wiring and plumbing and retrofitting the preexisting closet to function as a portal for the laundry center plus 400 a piece for each stack washer dryer from scratch and dent supply house.

    the most money over builder grade was the under cabinet lighting which was relatively cheap about 20.00

    and perhaps the fancier vanity lighting and living room and kitchen lighting purchased from odd lots 10 bucks a piece retail value 60-100 a piece

    laminate over carpet was actually a bit of a savings.

    so overall maybe 1500 over normal renovating costs for both units.

    I purchased oops paint so I saved there.

    worked side by side with the contractor hands on in the dirt

    to save money and learn at the same time.

    and countless hours working on the design elements.

    on one unit I repurposed a track light and hung it as a vanity light it looked awesome and cost me $5.00

    I bought a round mirror from ikea for 14.00 so no extra money there

    put a glass shelf underneath total cost for bathroom remodel not including vanity $ 27.00

    1Reply
  • Account Closed
    Investor · Newnan, GA · Member since 2013 · 86 posts · 33 votes
    12y

    We've tried a similar rental model as well. We've bought four SFR for an average of $17.5K each and done $40K + in renovations each. Our design criteria was to have zero major repairs for twenty years. All are paid for, no debt, and I'll pass them on to my kids. We now have the nicest houses in the neighborhood (a C- area), so far we're keeping them full and getting paid on time.

    0Reply
  • Steven Maduro
    OP
    Decatur, GA · Member since 2012 · 198 posts · 59 votes
    12y

    It is always a gamble when spending money.

    but like the movie Field of Dreams said over and over

    If you build it they will come.

    I believe that there are people who although don't make much

    and cannot afford the extras would love to have the extras and take care of the privilege.

    What I have found is that if you price too low you get people who are too slick for their own good.

    It is my model to offer the upgrades for the same price as my competition.

    not lower but the same.

    So the value is built in upon lease signing.

    Compared to some of my land lord friends

    I have saved money in not being vacant.

    I have one friend who has had a unit vacant nine months over a three year period. he rents a basic no frills brand apartment

    and charges the maximum the neighborhood allows

    and seems to always have disgruntled tenants

    where I have averaged one month and this was due to cleaning and repairs but the unit only spent 3 days on the market before being rented.

    My tenants in the doo dad units seem to be quite pleased and work with me instead of against me.

    1Reply
  • Steven Maduro
    OP
    Decatur, GA · Member since 2012 · 198 posts · 59 votes
    12y

    @Steve Babiak

    Yes thank you.

    I had trouble locating that post, and wanted to tag onto it.

    0Reply
  • Steven Maduro
    OP
    Decatur, GA · Member since 2012 · 198 posts · 59 votes
    12y

    In all fairness to K MArie Poe great post writer on the original thread.

    the original couple that went ga ga over the shower head ended up having to break their lease after 10 months they could no longer afford the rent. they did provide fair warning and did their best to clean up the apartment.

    and were understanding when I did not return their security deposit.

    Moreover, they were never a day late with their rent.

    they left the place rather stinky due to a rotten potato in the cabinet which went unnoticed

    and I spent 3 weeks cleaning the place to get rid of the stinky weed and cigarette smell.

    the other first tenant was a nightmare

    he paid on time and was clean but did he complain about every single little thing.

    since those renters moved out

    I have had no problems from the subsequent tenants

    The difference was that the second tenants moved into a place with

    all the appliances in place. including dishwasher

    Overall I think I will always strive to offer more for the same dime. whenever possible.

    fyi

    and the no vacancy piece I think is a testament to the business model

    0Reply
  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    12y

    @Steven Maduro I do some of what you did. One thing I don't buy for cheap is faucets. I want a tried and true model that I can find parts for. I buy nice ones, but not discontinued items. Try fixing a leaky faucet by looking for a discontinued $10 part that doesn't exist so now you have to buy another one. Go with the popular model and you only have to purchase one and it can be repaired for years in the future.

    2Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    12y

    I have to concur with @Bill S. - I try to use Moen wherever possible.

    Although I just installed a utility tub faucet with pull out sprayer that was Glacier Bay - but first really searched hard for another source for that faucet.

    0Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y
    Originally posted by @Steven Maduro:
    In all fairness to K MArie Poe great post writer on the original thread.
    the original couple that went ga ga over the shower head ended up having to break their lease after 10 months they could no longer afford the rent. they did provide fair warning and did their best to clean up the apartment.

    and were understanding when I did not return their security deposit.

    Moreover, they were never a day late with their rent.

    they left the place rather stinky due to a rotten potato in the cabinet which went unnoticed

    and I spent 3 weeks cleaning the place to get rid of the stinky weed and cigarette smell.

    the other first tenant was a nightmare

    he paid on time and was clean but did he complain about every single little thing.

    since those renters moved out

    I have had no problems from the subsequent tenants

    The difference was that the second tenants moved into a place with

    all the appliances in place. including dishwasher

    Overall I think I will always strive to offer more for the same dime. whenever possible.

    fyi

    and the no vacancy piece I think is a testament to the business model

    Glad to hear it's going well. I think everyone has a different to tolerance when it comes to land lording. And yours is very different from mine. It sounds like you have had turn over in both units in less than year. Great for the learning curve, but not so great for bottom line. You say you had no vacancies, but 3 weeks of cleaning that keeps the property unrented is a vacancy to me. Hopefully keeping the damage deposit helped some with that.

    Still not convinced it's the amenities that are helping you find long term tenants, since you haven't had any yet. Looking forward to the next annual update.

    0Reply
  • Pat S.Pro Member
    Real Estate Broker · Asheville, NC · Member since 2013 · 82 posts · 29 votes
    12y

    Great post Steven! Glad to hear your experience. As I've been comin up with my business plan and rehab concepts for buy/holds I've documented some of those same assumptions into my plan. Good to know that your experience confirms that in some cases, offering an above average unit can result in in both tangible and intangible benefits.
    Pat

    1Reply
  • Steven Maduro
    OP
    Decatur, GA · Member since 2012 · 198 posts · 59 votes
    12y

    @K. Marie Poe

    You are a tough cookie :)

    But I will win you over soon enough.

    You keep me on my toes and make me realize that there are higher goals I can set.

    I am still in my infancy in this real estate game and I am mostly happy to be able to make a living.

    Perhaps it is time to reach for higher goals.

    so thanks for the tough love.

    0Reply
  • Michael Seeker
    Investor · Louisville, KY · Member since 2011 · 1k+ posts · 1k+ votes
    12y
    Originally posted by @Matt Devincenzo:
    Congrats @Steven Maduro !

    I've done similar, not quite as much as you have with the under cabinet lighting and waterfall faucet ect. I had a bathroom in my most recent acquisition that needed a new shower stall and sub floor due to some rot. I could have probably gotten away with doing it for about $750 or so. Instead I did essentially a full redo on the bathroom and added a tub instead. That required moving a wall out a little and then all new drywall/durock, tile, toilet ect. That cost about $2500, so an additional $1750. But it looks nice and clean, whereas the other way it would have still felt old when I was done. I think, though I don't know as this property is a new area for me, it got me an additional $50-75/mo rent and a tenant that wants to stay for a long long time.

    So it is a 3 year pay off for the cost, but the intangible benefit of reduced vacancy/turnover and maintenance I believe will more than pay for itself in the next year or so.

    There is a balance to taking it up a notch versus over improving, but striking that balance will definitely payoff over the long term.

    I like to consider the added value to the building whenever making renovations. If you add $50 to the rent (assume expenses won't increase due to this), you're adding $600/year in bottom line income. At a 10 CAP, that's $6K of added value for only $1750 in extra cost.

    To me, this is a no-brainer, but it really does depend on the areas you invest in and your business model.

    0Reply
  • Steven Maduro
    OP
    Decatur, GA · Member since 2012 · 198 posts · 59 votes
    12y

    When you look at numbers like that

    As you said it is a no brainer.

    0Reply
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