Atlanta, GA · Member since 2015 · 3 posts · 0 votes
Hello everyone,
So this is actually my very first post but I have been reading on this site for some time, please point me in the right direction if this post is in the wrong forum.
I currently own a condo in Metro Atlanta in which after all expenses (including HOA) are around $900 (my roommate me gives me $500 per month...is this considered house hacking?). Rentals in my complex are already going for around $1200 per month. Knowing this I would like to try and find another place soon and list mine so I can start this whole REI process!
My questions is this, should I consider sprucing my place up (update kitchen and bathroom) to try and demand more rent (comps in my area reach as high as $1500 per month). Or should I be happy with what I can most likely get with my property being as is?
Please let me know some thoughts, and I am more than willing to go post some pictures and give more details as necessary..
Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
9y
If they look tired or dates I would spruce up to be more appealing to buyers. There is a balance between letting the new buyers do the reno's the way they want them and the buyers not having the cash to do it so they want it done already. Try to look at similar properties that are for sale and what their condition is. Pay particular attention to flooring.
Bathrooms seem to get the most bang for the buck. In the kitchen, I'd look at smaller upgrades rather than a big change. Even simple things like updating fixtures (plumbing, lighting, hardware, blinds) and paint can make a big difference.
Contractor · Atlanta, GA · Member since 2015 · 236 posts · 91 votes
9y
@Matt Mabry unless it is extremely outdated and/or in poor condition then I wouldn't do anything drastic. I am assuming it wasn't too bad since you were living there and had a roommate paying you rent. With that said, if a place is outdated I typically change fixtures (light fixtures, fans, door and cabinet hardware), paint kitchen cabinets, and paint the unit. Depending on the flooring and kitchen appliances you may need to replace those also. Just curious, where is the condo at? That would also dictate what you need to do. Looking at what other people have in their units for rent around would help you figure out what to do.
Atlanta, GA · Member since 2015 · 3 posts · 0 votes
9y
Thanks @Adam Abdel-Hafez.. My mother is a RE agent and she seems to think the kitchen and bathrooms need serious updated, however everything is in good condition. I am hesitant to put an additional $10K into updates unless I am very confident I can get added rent. You are right I will need to look at comparable rental units, but most of what is compareable is new construction. I am in Sandy Spring/Perimeter area just off Ga-400/285.
Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
9y
Matt Mabry
I think you have your answer! I wish my mom was an agent in my area. At least you know she's giving you a straight answer.
Do you have pictures of your place and a comparable unit?
If you don't want to spend 10k to raise the rent don't. Figure out how to raise the rent while spending less money. It's not always true, but often I find I can raise rents or lower expense just by studying the problems and tweaking things.
Contractor · Atlanta, GA · Member since 2015 · 236 posts · 91 votes
9y
I work with a management company and have done hundreds of rental turns and turnkey rehabs. Now, these were all on sfr and small mfr and apartments, so I haven't really done any for condos. Typically for rentals, I really try to do as minimal as possible. Anyways, if you do the $10k in upgrades, that would take you 3 years to recover that investment.
Flipper/Rehabber · Acworth, GA · Member since 2014 · 246 posts · 92 votes
9y
Hey Matt,
Congratulations on getting started and your first post! This site is a great resource. Just make sure your taking advice from the right people! Everyone has an opinion..
Yes if your living in your home and renting a portion out, that is considered house hacking, and its a great way to get started investing.
As to your question, you need to look at a couple things. How much will it cost to get your place updated to the point that those are that are renting for 1,500? Do you have those funds available? If so, how long will it take to pay that money back by getting the increased rent? (If you spend another $7K, and it gets you another 300/mo then it would take about 2 years to pay back that additional investment).
Or you can look at it like a percentage return. (Spending $7K gets another 300/mo so that would be a 51.4% Cash on Cash return). I usually move forward if something will make me at least 12% CoC return. I got that % by taking $300 x 12 months and dividing by $7K total investment.
Hope that helps. If this brings up any more questions, PM me on my page.
Investor · Hendersonville, NC · Member since 2016 · 138 posts · 71 votes
9y
As @Becca Summers said, it's a math problem. Calculate your returns with with repairs and higher rent vs. without the repairs and lower rent.
I would only add that you need to figure in any downtime. With no repairs, you may be able to rent it immediately. With repairs, you may lose 1-2 months of rent.
San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
9y
I'd suggest just starting out as-is to find out if you even want to be a landlord, or if the HOA will be a problem there. And start out with month to month agreement, in case you want out of that tenant or that property as a landlord.