Should I add a second bathroom before I rent?

Question

Hey BP,

Couple questions on our new property that have come up:

1.  There is plenty of room next to the original bathroom to make a second full bath off the master bedroom turning it into a very nice master suite.  This is something that we are DEFINITELY going to do before we sell in 6-8 years because it will add about 25k to the sale price.  Is it better to add the bathroom now, leading to a couple hundred dollars of cash flow more a month, and also likely better tenants, or should we leave it like it is and remodel before we sell?

2.  The floors are really nice (after we scraped off the grime - it was a foreclosure).  It's a honey laminate that is really sturdy.  The doors and trim are slightly darker wood and feel slightly dated but are in really good condition.  I would love to paint the trim and doors white or just replace it all.  Is it better to completely modernize the space before renting?  Or should I let my tenants destroy the old doors a bit and just replace them when we sell?

3.  Lastly, I know we're entering the blackout period for rentals.  Probably pretty unlikely we'll be ready for a tenant on 11/1.  Probably pretty unlikely that we'll get a tenant on 12/1?  Probably impossible to find a tenant on 1/1 (no one's gonna move on new years day).  If I decide to do some of the work above, it will slide me further toward spring and better chance of tenants, but I'll be paying about 400/mo in hoa/tax/ins until there is a tenant.  Should I push it and try and get someone in there ASAP or is it better to take my time making the place perfect before renting?

I guess I'm just looking for any guidance you guys can give me!  The place will be a solid B when the new paint is in, but with another bath and new doors, trim, etc, could easily slide into A territory, ideally adding about 2-400 dollars in cash flow.

Thanks in advance for the help!!

Tim W

Tim Wittenborn · Answer

Thanks for the quick response!

We are going to add the second bathroom and do some other cosmetic work over the next two months, probably list early January and hope to get a tenant in by February 1st.  After doing some more market analysis, the second bathroom will add around 175 per month in cash flow.  Over 5 years of renting, we'll be looking at potentially 10k, which will way more than pay off the bathroom.

Wil Reichard · Answer

1. Add the new bathroom now. If it will be done later down the road, might as well add it and benefit from the extra cash flow. 2. I would wait to replace them. Maybe just some paint for now. If this was a A class property I would reconsider, but being a B property I don't think people will expect new trim and doors unless it makes the rest of the house look very used.

3. Plan for the best, expect the worst. Good luck to ya