Repairing Occupied Units

15 Replies

I just completed the home inspection yesterday and by walking through  the units (3 of which are currently occupied), I know I want to rip out carpet and put in new floors. One unit will be available for me to move in by closing, so I will have full access to do necessary repairs/updates on the unit I will be in which is cool. However I am not sure how to go about replacing floors in other units that are currently occupied. BTW thanks to feedback from my new BP fam, I think I am going to do with mostly "wood looking tile," vinyl plank, or maybe engineered wood!

How do you go about doing floors in occupied units? Seems like tenants may be displaced as they will need to move couches and other belongings.  I have heard of suggestions to wait until tenants vacate to update but what if they plan on being around for a while?  I also heard of reserving a hotel room for tenants while work is completed $$$. Any other suggestions?

I've always waited until they leave.  If I live in the house, I will do a room at a time.  By the time they leave, the carpet might be destroyed and you will have an excellent reason to replace the floors.

I used laminate floating floors on my last house. Price ended up being about $1600 for 1428 sqft house for materials.  The floors have a 50 yr warranty and are fairly easy for a novice to put down.  I paid a friend 1500 to put them in this time and it came out looking great.

i definitely wouldnt reserve a hotel room. That's $$ out of your pocket. Most tenants won't mind being inconvenienced a little bit due to an eager landlord looking to improve the QOL. especially if they plan on staying around a while. 

As you already noted I would suggest not messing with anything until they are vacant. It's too much of a headache to work around the tenants. I would ask yourself what the purpose of immediately replacing the floors would be? It's not a necessity at the moment so why fix something to doesn't really need fixing? If it's just the excitement of getting your first multi and wanting to put your own touches on it then don't do it. 

@Chris K. Totally get your point. Now here is the bigger my motivation...the current rents are currently under market by $75 each unit, so I do want to get in sooner than later to start making repairs to help justify increasing rents ASAP.

3 other options: evict, per diem, or shuffle

Evict:  Depending on the length of their rental agreement and any rent-control ordinances in place for your area, you may also want to consider terminating the tenancy, then doing the work with vacant units.

Of course it's usually not a great idea to evict tenants that are paying their rent!  ...but if the fair market rent of the units will be much higher after you've updated them, it might make sense.  

Per diem:  You might consider offering them cash to take a vacation or stay with someone else.  Offer them a daily cash amount that's lower than what it would cost to put them into a hotel.  It could be a win-win for you and your tenant.

I would consider paying per diems or hotels very high risk.  Any delay by your contractor would mean you're stuck paying fees longer, while simultaneously losing cash flow on an unoccupied unit.

Shuffle:  Since you've got one unit that will be unoccupied until you move in, would it make sense to move the tenant from their unit to yours until work is completed on theirs? 

If you're doing something like tile flooring, it will take at least a few days per unit, and remember that any time you rip something out of a house, you may discover a problem that needs more time to fix than you anticipated!

Good luck!  

Realistically I know I don't want to fix them up all at once. I'm going to start with mine and maybe one other unit.

@James Hocker wow! Scratching head at the shuffling idea. I would have never though of it but this one would probably be more messy than it sounds... I want to know what others think about this shuffling idea. Your suggestions are appreciated :)

Personally, I would think that depends a LOT on the particular tenant.  This of course will depend upon how well you or your property manager knows your tenant.  If the tenant has a problem with it, then I would probably just defer it until the unit is vacant.  I would think though that the tenant would probably be happy enough to put up with the inconvenience.

If it's a particularly good tenant that you anticipate being there for a long time, I would even go so far as to present the tenant with a the final choice between the specific flooring options that you select.  Chances are that you are going to be OK with a few different options in the same general price range, so let a good tenant make the final call and engender that much more good will.

@Account Closed  I agree with you guys about good tenants being open to inconvenience, since I am trying to improve the quality of their living space. Plu,s during the inspection they all pretty much complained how much they hated they old carpet). The tenants in question for my initial floor project have been there for over 10yrs! I love the idea of giving them the final selection on flooring...I believe that is quite respectful and they would be receptive to that!  Although I do not know the tenants all that well yet, from conversations I have had with them, the longterm tenants seeem like they would work with me to get the job done.

Do what you need to do when you need to do it. Staying on top of maintenance, repairs, upgrades and updates will help you retain good tenants. Most of our tenants are long term and we do not hesitate talking with them and making a plan together on how to approach upgrades such as changing floor covering. 

One time a tenant's social worker arranged for moving and storage of a tenant's belongings and we paid for a week stay in a hotel while we did a major overhaul of their apartment. We were changing all flooring to accommodate use of a wheel chair and decided to repaint and update other things as well.  The tenant had been in place for 20 years and plans to live there for the rest of their lives.

Most of the time, we arrange to do major work when the tenant is on vacation, or when the tenant can stay temporarily with family or friends. We have occasionally compensated a tenant for "loss of use" when they were overly inconvenienced.

I guess I am of the opposite view.  If your current rents are about $75 under market value, you may want to consider letting one tenant go at a time, do the necessary repairs, and when you are ready to Re-Rent you can Say Completely Remodeled, NEW Carpet etc, and you can get a little higher rent maybe even $100 more a month.   first Impressions are everything and when people walk  in smelling fresh carpet and fresh paint, you will get a higher rent, but if you put in the carpet while your current tenants live there, when they go to vacate you can't say New Carpet...

It is just food for thought...

Originally posted by @Danielle Jenkins:

Chris K. Totally get your point. Now here is the bigger my motivation...the current rents are currently under market by $75 each unit, so I do want to get in sooner than later to start making repairs to help justify increasing rents ASAP.

If your primary motivation is to get higher rent per unit, then your compass would lead you to clear the units, renovate and go for what the market will bear. That said, is $75 per unit really enough to justify the loss of rent and the utilities you would need to pay until the unit is again rent ready? As well as the extra marketing, tenant screening, and leasing up work?  

I would think that making repairs should be done regardless for habitability and wouldn't justify a rent raise. Improvements might. But also consider the lives of the tenants and the neighborhood. What you do impacts them, for better or worse.

I like to offer tenants the opportunity to provide a list of repairs they'd like made when I take ownership of a new building. It gets you off on a good foot with the new tenants, and usually these are small things that just haven't been addressed by the previous owner.

Then, after about 3 months, issue a rent increase to get closer to market rate. 

Your tenants will then either pay the increase, or give notice to leave. I don't like to make major upgrades (like replacing the flooring) until the units are vacant. 

@Marcia Maynard thanks for your feedback! This property needs someone and care and I am motivated primarily to bring it up to standard. I will also be living here so I want my tenants to be happy and I want to feel comfortable as well so some improvements and repairs are necessary. I am also motivated to bring rent up to market, however I want to go about things strategically to avoid losing tenants. I want to do things as smoothly as possible to avoid headaches as I still have a full time job to manage. I like the idea of planning with them to see what works best.

@Shiloe B. the list of repairs is a good idea. I think it shows the tenants that you care about what they have to say and that goes a long way. My opinion of what the unit needs may be much different than how they may perceive what it needs and what they feel it needs may turn out to be far less expensive.

If I can't work out a feasible deal with current tenants to enable me to get in and do work needed, I think I will probably wait for then to vacate naturally, I don't want to force them out when they are actually paying rent. As much as I would love to go in get the job done and bring rent up to market, patience is a virtue and waiting until units are vacant will generate less stress for me, especially since I am just starting out :)

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