When Do You Reposition a Property?

Question

​Do you prefer renovating upfront before tenants, or improving gradually over time?

Ryan Spath · Answer

I have done both. Now being older and wiser doing anything major upfront is the way to go in my opinion. Its like you are taking a proactive approach to a headache later on.

Stephen Quesinberry · Answer

I much prefer doing it upfront. It improves the property and sets the tone with current and new residents that new ownership cares and is investing back into the community. It also helps justify any rent increases you may implement and cuts down on ongoing repair calls during the hold.

Overall, it makes for a much cleaner, more predictable hold and lets you focus on operations instead of constantly reacting to issues.

Drew Sygit · Answer

It depends...

Systems like electrical, HVAC and plumbing are typically best to handle ASAP.

Cosmetic improvements need to be supported by increased rents:- What's the recovery/payback timeline?- What's the expected lifetime before tenants trash it and it needs updating again?

Then there's also the budget!

Kay S. · Answer

Hi Kelly! I’ve done it both ways, and I definitely prefer renovating upfront versus improving units slowly over time.

For me, the biggest reason is rent potential. I have two long-term tenants who pre-date my ownership, and those units are still 1 bed/1 bath. The other units have been renovated into 2 bed/1 bath layouts and rent for about $200/month more. That difference adds up quickly.

The second reason is maintenance. Renovated units tend to have fewer surprise repairs because so much has already been addressed upfront. When the work is done at acquisition and included in the original financing, it also helps reduce future cash flow interruptions.

The third reason is mental load. When the major work is completed upfront, the property is much easier to operate. You’re not constantly wondering what will break next or whether you’ll have enough cash available when it does.

So for me, the “slow and cheaper” approach can sometimes feel less expensive in the moment, but renovating upfront has created better rents, lower maintenance, and a much smoother ownership experience.

When Do You Reposition a Property?

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