what do you think? (2b1.5b)

Question

I just recently finished a renovation on my townhouse. it is a 2 bedroom 1.5 bathroom, has a carport for 2 vehicles. HOA, but they deal with yard, exterior, garbage. I had talked with an agent on the value and seems to be $250,000. it's not bad for $175,000 purchase. I am currently in the process on renting the unit out. but, wanted to see what everyone thinks about the renovation. the appliances are new (got a deal for the dryer and stove). dishwasher is not new, but only used once. I had the back splash re-done in the kitchen, light replaced in kitchen, epoxy the countertop, painted the entire inside,  replaced the doors/hinges/handles, replaced the carpets to the stairs/2 bedrooms, replaced all ceiling lights and ceiling fan, replaced the water heater (old one was way out of date, also had my brother help me with that since he is in hvac), kitchen sink/faucet, bathroom mirrors, resurfaced the bath tub. I think that is all that I had done. Will need to so the yard a bit, it needs a little clean up.

Manuel Llanas · Answer

Thanks, I honestly have 0 experience in regards to decor and I was winging it with getting advice from the handyman. my original thought was to give the back splash a dove Grey color subway tile setup. but this one is definitely better looking. the epoxy finish to the countertop is quite a nice fit to it. though, I'm not expecting it to last that long. but the property will profit. mortgage is at $981 per month. if I rent it for $1,600 per month 12 month lease. I think it will do well. at least until I can turn it into a midterm rental.

Caleb Brown · Answer

Looks nice. There is some misc things you could update like the countertops, cabinets are older style, light switch faceplates, any light fixtures that are older, etc. I don't think you need to though. It will rent out well as it is. After turnovers you can do more extensive upgrades but if you increased the value already you don't need to overdo it.

Manuel Llanas · Answer

Thanks, but I'll be holding onto this property for a little bit. I will eventually sell it. The 1 year lease is keeping me from doing that. I want to sell this property to a veteran, so they can assume my loan and I free up my VA loan for getting another property.  The 3.25% should be very enticing to veterans. Since they'll assume that APR. But they can only do that if they live in the property itself.

Rod Hanks · Answer

If the appraiser appraised it for 279, then that's the value. The agent only pulls comps and give her opinion on value. The agents opinion has no weight with lenders in regards to  what they will lend on a property. The property is in decent shape for a rental, you never want to over improve a rental because you will not get it back in higher rents. A unit with granite countertops and high end finishes will rent exactly the same amount as another unit in the same complex with basic finishes. The property insurance seems fair but if you want me to run the numbers and see if I can save you a little let me know.

Manuel Llanas · Answer

There is now a bit of a problem that I have been dealing with. I talked with my real estate agent and she said that the value of my townhouse is 250k. I paid an appraiser and he valued it at 276k. But he had to go to other towns that were more than 30 minutes away. Fortuna has very few townhouses and the market mostly shows houses for sale or apartments for rent. The Lowest valued property in fortuna is 299k a 2 bed 1 bath and needs a bit of renovation. I had originally wanted to sell this townhouse. but the values that the agent and appraiser gave, seems off. So, I put the place up for rent for $1,600 per month with a $35 per pet fee. now it is making me $1,670 per month. mortgage at around $982 per month, hoa $98 per month, Landlord insurance is insane, given the fires in california. I'm looking at $178 per month. yet, I am still making income. I will eventually turn this place into a midterm rental with full furnishings. The Hospital nearby will make this property valuable and will rent for more. Though, I will need to be active. Has anyone come across a unique situation. with a property potentially being undervalued, due to a lack of similar properties around the neighborhood?

what do you think? (2b1.5b)

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