Updated over 4 years ago on . Most recent reply
rehab without renter or no rehab with immediate renter
Our first rental one year ago was inherited renter so we knew up front the immediate gain. Now a new dilemma, for which I continue trying to educate myself daily here on BP. If we could get a rent of $600 per month without rehab costs and no downtime, would it be worth it for calculated cash flow $135 per month? versus downtime of 3 months to rehab (cost being $34000 for purchase and $15000 rehab) and losing $1800 or more in rent, but could then charge $900 for rent?
If my brain is firing on all cylinders I would recoup the $1800 lost in 6 months by the increased rent. But we have 3 other rentals that we are getting rent ready, so it may be delay of more like 6 months.
And last, my fear of immediate renter, no rehab, cheaper rent is that when I do want to remodel it (maybe in 2022) it may be occupied.
Most Popular Reply
@Sheena Drake I am not sure the rehab is worth the money. It will cost you $15,000 for rehab plus $1800 rent loss. Total cost to increase rent is $16,800. Your rent increase is $300 which means it will take you 56 months ($16,800/$300) to break even on the rehab. That is 56 months return on investment, not 6 months.