I'm re-renting an apartment unit at $450 more than the previous long-term resident paid. It does need renovation. I could go crazy at HD/Lowes finding things that could be replaced.
Some of the updates are discretionary and not absolutely necessary. My question is, is there a formula others use when rehabbing units for incoming tenants? Such as, spend no more than what you will be paid back for in 1 year? In that case I would spend no more than $5400 ($450x12).
Yes, the unit could use that much improvement! However, I can get by without doing some things. Examples of what it needs: new windows, hardwood floor refinishing, doors, tile kitchen floor, light and bathroom fixtures...
Any thoughts appreciated.
The key is knowing if you will really get 450 more per month after the rehab is completed.
You could think you get that amount and spend 5,400 but instead get half that and it takes two years etc.
The type of tenant you rent to also is key. Median type tenants and affluent expect certain things usually more than low income.
Low income however has income stability issues and tend to be more unstable and have additional wear and tear on the properties due to living lifestyle.
@Joel Owens Yes, I should have mentioned the unit is pre rented. The new resident is a nurse. Thx!!
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