Streamline / Limited 203k Loan. Is it worth it?

2 Replies

Hello everyone,

I'm trying to decide if it is worth it to use a streamline 203k loan to install central A/C and remodel some of the interior, such as raise the ceiling, replace the roof / gutters, and remove and paint wall paneling.

The house is not in that bad of shape which is why I'm asking if I should use the 203k loan or dip into my savings. I'm 24 with a monthly income of $3k, however, this house will have my monthly income increasing to 4k hopefully.

@Account Closed Why not do it in stages and just let the rent cover it?

I'd put HVAC at the top of the list.

Will raising the ceiling generate more rental income? If not then I wouldn't do it on a rental.

Why remove wall paneling? Either paint it or go over top with 1/4" thick drywall. Again will any of this increase rents?

Is roof leaking? If not then don't mess with it for now. Tenants don't care what the roof looks like as long as it keeps them dry (unless you have a high end rental)

You can easily put gutters on later while a tenant is living there and paying rent.

If you did do all these upgrades/repairs how many months rent would you loose?

I personally would do things that have to be done and get a tenant paying rent.

Then next time you have a vacancy and have hopefully years of rental income you can make more upgrades from your cash reserves.

Now if you were going to flip the house then your list of repairs and upgrades would make more sense and cents.

@John Underwood Thanks John, that's awesome advice and I'm definitely thinking the same way.  I'm new to this and constantly hear value add so it's steering me into the direction of wanting to put money into my house.  I plan on buying my next property (a multi family) within 6 months so I figure the best thing to do is save money and if people are willing to live in the house as is, let them.