Good afternoon, I've recently joined the forums but have been doing lots of reading on bigger pockets prior to signing up. I'm 27 years old and just finished working 7 years of heavy civil engineering camp jobs (fly in/out). I'm finally back home with a good job and can handle running around for a rental property now. I made the jump to purchase my first rental property which is closing next Thursday.
It's a duplex in Dieppe, New-Brunswick in a clean neighborhood. Up/down duplex with 2 bedroom/1bath in each unit. Built in 1986.
I bought it for a discounted price knowing that I had to replace the majority of the windows and refresh the basement unit (flooring, paint, fixtures). I also knew that the previous owner neglected the roof on the garage. it ended up leaking and causing lot's of black mold.
My question is: if you were in my shoes, would you invest money in repairing the garage? roof, and drywall / insulation. I know it won't add much $ to my monthly rent but might attract tenants quicker. Might also benefit if I was to sell the rental in 5-10 years.
Purchase price : 140K$
Renos: 14K$ (all windows, basement flooring +painting)
ARV: 185K$ x 0.80 = 148K - 154K = $-6K
After all ill be able to get my down payment and some of my reno's back from my refi. any other $ put into the garage will be out of my reserves. It's not a home run in the BRRR world but a solid start I think.
Here's a few pics:
Yes, make the fix to the garage.
A quality garage speaks to the general quality of the house and will communicate the seriousness of your approach to business.
Consider renting the garage separately to a contractor or as a local alternative to self-storage if it won’t command incremental rent from a tenant.
In many urban locations the garage rental can approach that of a small apartment.
Initially, you can probably gut the garage and fix the roof. Most people don’t expect a fully drywalled garage.
Then Figure out what best to do with it. Include it as part of the house, or rent it separately. In your location, keeping the cars out of snow is probably a plus.
Maybe at some point in the future, you can re-drywall it.