How would you renovate a tenant occupied unit.

Question

How would you renovate a tenant occupied unit or would you completely stay away from this Idea? We had recently bought our first duplex in February and inherited a tenant on one side. We are House hacking and renovating one unit before moving in and would like too renovate the other unit so we can refinance and get a HELOC, Our tenants lease is up in July and would like too keep them in place what route would be best too go about this.

Thanks in advance

Trenton Miller · Answer

I wouldn't renovate a unit while a tenant is in place.  Save it for after they move out and increase rents once the renovation is complete and new tenants apply.

Matt Nico · Answer

@Domenic Santarelli

I agree with most of the other people posting before me, but i have done 3 renovations while the tenant is occupying.

If you want to go that direction, id ask them if they would want a new, fresh remodel. Explain to them (like I do) that you are trying to improve the home value and ALSO the space for them to live in. Usually tenants appreciate when i update things and make things nicer. Ive redone kitchens, bathrooms, paint, flooring, you name it while tenants occupy. Just be clean when you can and keep the area safe.

Good luck,

Matt

Theresa Harris · Answer

I wouldn't bother.  The only option if it needs renovations would be to fix up the half you are living in and then have them move permanently over to that unit while you do the renos to the second unit.  Best time to do renos is when tenants move out, but only do them if it will add value to the home and you can recoup the costs with increased rent.

Kyle J. · Answer

I would not renovate the side that was tenant-occupied.  Especially not for the purpose of getting a HELOC.  I have a couple HELOCs on rental properties and on one of the appraisals I know the appraiser didn't even go inside (it was just a drive-by).  Not sure on the other one as I wasn't there for it but I know the inside didn't have a big impact on the appraised value even if they did.   Either way, I would not recommend renovating a tenant-occupied rental.

David Clay · Answer

How about this, renovate the one side you're living in and finish it before end of the tenant's lease. Sign the tenant to a new lease at a higher rate and move that tenant into the newly remodeled unit. He'll be happy with the new look and you can move on to updating the other unit and getting your heloc setup. Timelines are important here so give that some consideration. If you need the heloc faster you could attempt to do both simultaneously, but like others have said it becomes a bit more complicated. I haven't done any with a tenant inside, but prior to getting involved in REI my wife and I had a couple jobs done in our home and she hated it. She won't even consider getting work done if we are still in the house now. We have to be gone for a bit or some other work around. Sigh. Anyway, good luck.

Robert Burnell · Answer

Seems to be some pretty solid advice here. I would hold off on renovations with the tenant in place. Since you inherited the tenant, most likely they are ok with the current living situation. I would renovate one at a time or chose not to renew lease and do both during that time. Good Luck.

Dillon Dale · Answer

@Domenic Santarelli wait until they move out. Increase their rent upon renewal, and if they stay, great. If they move out, great. Then you can rehab and increase the rents

Michael King · Answer

I have an inherited tenant that has been in place for 6 years. When I met him his complaint was that his apartment hadn't been renovated in 6 years. I can't imagine going in to paint and having to wait for his lazy a$$ to get out of bed before I could send someone in. Then I'm sure he'd complain about the smell, the color...anything at all. But then, no one else has $hitty tenants.

William Walker · Answer

Usually interior renovations won’t heavily impact HELOC. most appraisers barely do a drive by and run comps based on sq ft and local sales.

How would you renovate a tenant occupied unit.

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