Real Estate Investor · Ann Arbor, MI · Member since 2009 · 130 posts · 4 votes
My current property comps are 1000/mo, but I'm wondering if I spend a little more to make the apartment nicer would it be worth the investment? The unit is a condo that used to be an apartment rented by an apartment community and has had some minor updates but generally the fixtures and colors are circa 1995-2000. Many of these units are rented out consistently as-is without any upgrades. One of the bathrooms in the unit I bought was partially refinished which really only leaves the kitchen and 2nd bathroom to update. I'm looking at some of the cheaper peel and stick flooring and cabinet refinishing kits and appliance paint to give it a totally different look for under a thousand bucks.
Of course this will take my time to complete, but my thinking is that if I can net an extra $200-$400/mo it would be more than worthwhile.
Then again, do renters even care? Are there other factors that would be "make or break" besides the updated fixtures?
Like for selling houses, its dependent on the neighborhood. If most similar apartments rent at around $1000 in the same area, there's little you can do that would merit you're renting for $1400. People who are willing to pay $1400 will go to a different area where rents are commonly $1400.
OTOH, if most units rent for more than you're charging, and you can figure out why, you may be able to push up your rent by making a few changes.
Generally, I'd be surprised if you could spend $1000 and push up rents by $400. One of my houses doesn't have a garage. I'm pretty sure I could spend $5000 and add a one car garage and push up rents. But I'd be surprised if I could get $100 more. Pretty sure I could get $50.
Jon Holdman makes a great point about the stretch in rents being predicated on the units around it.
One additional item to consider is that an updated unit may have less vacancy and rent quicker. If that's the case in your market, you may make back the investment in occupancy rate alone.