Brookings, SD · Member since 2017 · 3 posts · 2 votes
Hi guys! Finally bought my first rental property. It is a duplex in need of a full rehab. I am wondering what appraisers focus on more with an investment property? NOI or condition and amenities. I can lower my monthly expenses $300 a month by splitting the gas and water, but it would cut into my rehab budget quite a bit. In a perfect world I would split utilities and do a full renovation, but for now I'd like to focus on getting a high appraisal and getting my money out of the deal. Then I would save up the money to convert the utilities over the next few years. Just wondering what you guys would do in this situation and knowing what to focus on for a higher appraisal. Thank you!
Realtor · NJ · Member since 2023 · 215 posts · 99 votes
1y
Agree with Caleb here. It would be a lot easier / cheaper to split utilities when property is gutted as opposed to doing it after it's fully renovated.
Brookings, SD · Member since 2017 · 3 posts · 2 votes
1y
@JooYung Choi I agree with this. My dad and I do hvac and plumbing, so we'll have to remove drywall etc. I think I'll spend the extra money up front to convert it. So the appraisal won't be based on NOI and cap rate? I wasn't sure because the unit is only ideal for an investor or someone looking to house hack.
Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
1y
Hi Jordan,
How much is the extra rehab cost for splitting utilities? If you're keeping the property for a while, it sounds like it would be a good idea to say 300 a month given the breakeven number makes sense. I would also look at other comps and decide from there.