Remodel or Keep as is

[Chad Chiles]

Hey All,

Me and my partner are having a general discussion on our properties that need some updating. We currently rent out our 3 Bd units for $1,500 per month. Some are out dated and need face lifts, (new floors, paint, etc.) nothing major, yet. We don’t have any issues getting renters in our college town but I think they’re is potential to ask for more money doing these things. What’s your opinion on this? Just continue with our cash flowing properties or put some money into them and ask for higher rent? We’ve talked about just cleaning them up when we want to sell and move on to the next property, as well. Anyone else find themselves thinking about this situation?

[Matthew Powell]

Hey Chad! If the rent comps in your area allow you to increase your rent by adding some CapEx, go for it! However, if it puts you a lot higher than the comps then I'd keep evaluating. I have a rule of thumb of "Make your mom proud" of the place with your CapEx improvements, haha. Hope this helps!