I'd like to get a bit of advice from the seasoned investors in the Lakewood, OH area.
I just purchased my first investment property up/down double on Cook Street. I'm moving into the lower unit, and the upstairs tenants are vacating at the end of October. There is a large 3rd floor that I'd like to paint, add at least a half bath, and install a stand alone heating/cooling unit. This would be a part of the upstairs unit as a rental making it a large 3rd bedroom. This would bump rent from roughly 850 now to probably 1250.
The question is would you renovate that right away? Or put renters in the top 2 bedrooms only while the 3rd floor gets rehabbed during the winter? Part of my thought process was that it was going to possibly be difficult renting the top unit this late in the season, but so far word of mouth has shown that to not be true.
Any advice or suggestions would be greatly appreciated from this new landlord!
@Vic Delgado , While I'm not from your location and I don't know your market, but I would renovate and then seek a tenant. This is more of a personal preference, but I like to get out the heavy lifting up front. If you're able to find a tenant and talk them into renting it out for a lesser price while you renovate, and locking them into a higher rate once it's completed, isn't a bad idea either. I think you may find it difficult to find someone willing to do that though.
My questions to you would be, do you need that extra money coming in now or can you hold off until it's all completed? Obviously this would be another obstacle that would need to be considered. Good luck!
Welcome to Lakewood!! I think you will find it is a great welcoming community with so much to do especially your street being right by Melt and Lakewood park.
I would not consider myself a seasoned investor but I have a very similar situation to yours except I am on the top unit which is basically a 3 bed 2 bath on top of the 2 bed 1 bath unit below. With the third floor being the biggest room by far like you said. Not sure how finished your third floor is but mine is livable. Not the nicest, but I do plan to rehab it soon with new carpet and a rehabbed bathroom.
Also from what I have seen the going rate is about $1000 for a 2/1 in Lakewood. However, I just renewed my tenent's rent to $800 which I feel is still far below rent.
I think with how hot Lakewood is right now you should have no problem finding people to rent the top floor with renovations maybe with a discounted rate of $900 or $800 if you wanted people lining up at your door. Ive heard on the podcast maybe you can even give a discounted rate for a certain amount of months and have qualified tenants do the work for you (Obviously make sure they are qualified to do the work before you let someone just tear your property up) but that may not be necessary since you are living there as well.
Hope that helped.....I feel like I just ranted on and on.
We have quite a few properties in Lakewood and no matter when we have a vacancy it is filled before the previous tenant leaves. If you can wait I would do the renovations first. Good luck!
Thanks for replying everyone!
I would do the work upfront. Sounds like a pain doing the reno with tenants already in place. Do a cost analysis of rent differential vs the vacancy cost and you will find your answer.
Congrats btw, I am doing the same thing over in Lake County, moved into my duplex this summer.