How I Increased Rent by 47% in 1 month- Duplex Value Add CASH COW
Summary
Background
This January I bought my first multi-family investment property in Covington, GA. I have previously owned condo's & SFR's for the past 5 years so I thought I would bring my same value add approach to my first Duplex deal. The property has 2BR & 1BA on each side.
I bought the property for $73,500 off the MLS from a tired landlord who neglected the property and did not maintain it at all. The units were both very run down and needed interior repairs. The current tenants who were in the property were paying $425/month & $475/month. Total cash flow was $900.
I did research on the area and looked up what nearby apartment complexes were charging for rent. I kept seeing a pattern that rent in well maintained nice complexes was going for $750 and up for 1 & 2 bedroom units. That fact alone told me that the market can handle those types of prices. My next action was to come up with a plan on how to add value to this property and justify charging at the same price points as the nearby apartments.
Value Add
- 1.Interior:
- a.New Paint throughout interior
- b.Added New Flooring (Allure Vinyl Plank)
- c.Added New Kitchen Cabinets
- d.Added New Granite Counter Tops
- e.Upgraded all Appliances
- f.Upgraded all Light Fixture
- 2.Exterior:
- a.Added a wood privacy fence around perimeter of the house and backyard
- b.Removed trees and shrubs
My main focus at this property was to provide an A+ property in a C+ neighborhood. Kitchens and bathrooms sell properties as we know and the same is true for rentals. I upgraded everything; cabinets, counter-tops, appliances, toilet, vanity etc.
On the exterior the property was exposed an all sides and did not have any form of privacy or backyard. I felt it was very important and would attract a lot of families and potential tenants with pets if I added a privacy wood fence around the property and separate the backyard down the middle to provide privacy to each duplex tenant.
Grand Finale
When I listed the property, I got tons of interest and activity. Majority of the potential tenants fell into these 3 buckets.
- The private backyard is what made them want the property, because they either had multiple pets or kids.
- They fell in love with the interior remodel.
- They told me I was crazy and the asking rent price was way too high for the neighborhood.
My hard work and ideas paid off! I was able to rent the property out both units and have had no problems to date with the property or the tenants.