Return on Investment on an apartment rehab

Return on Investment on an apartment rehab

Rental Property Investor · Cranford, NJ · Member since 2019 · 245 posts · 148 votes

If an under market apartment became vacant and needed $10,000 in renovations what sort of rental increase would you expect?

I understand the limit is really set by the area’s market, I’m just wondering what investors would expect.

Thanks in advance!

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  • Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    6y

    I would be very happy with a price increase of $150/mo. Capitalized at 7% and assuming 50% expense ratio, that increases the property value by nearly $13k, which is a good ROI in the first year. I would need strong evidence to believe that a $150/mo rental increase is possible, though, because it's easy to be too optimistic on a pro forma these days.

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