Updated almost 7 years ago on . Most recent reply
Updating a Kitchen and Baths
I help a lot of landlords buy and rent out Chicagoland rental buildings. -- On occasion, the rental unit has gotten to be too outdated to attract quality renters.
How do you determine the quality level for upgrades in a rental's kitchen and/or baths? -- I have a couple investor/landlords who have a lot of cash but only update on the cheap.
I have to hold back when explaining to them that nicer upgrades equals more qualified renters inquiring.
Example 1: Do you re-face kitchen cabinets or tear them out completely and replace them all? -- I opt for the latter but that could cost thousands more so I am curious what others think..
Example 2 (opposite scenario): I have a Chicago landlord who removed the building's main boiler and installed separate HVAC systems in each apartment so the renter controls and pays for heat and a/c him/herself (must have cost the owner at least $25,000 to do all this).
The boiler was perfectly fine but he was probably paying $3,500 to $4,500/year in heating costs. -- Now, he is asking to much for these updated units (raised from $1,300 to $1,600/mo plus heat) for this lower income Chicago neighborhood. -- In addition, renters in this area don't want to pay the higher rent if they need to also pay for heat.
Most Popular Reply
@John Meyers Tenants expect to have heat at no additional charge, but nice cosmetic upgrades only make sense if it increases the rent. A backsplash may look nice, but if I can't get anything for it, the bare wall works fine. A quality tenant is one who pays on time every month and stays a long time. I don't equate someone willing to pay more as more quality. I have evicted low renters and high renters. I have some low rent tenants that have been with me for 10 years. I wouldn't trade them for anything. The devil you know.