Evict and Renovate or keep old tenants and get by?
Would you buy a house where you had to evict a tenant on day one, spend 20,000 on renovations in an effort to make a great return with current market rates? I would have to float the mortgage for 5 months plus renovations but the rents are way under market value. The reason I ask is because in "The Book on Rental Property Investing" by Brandon Turner he writes that it would be a disaster to have that scenario. Is that terrible to take such a loss up front knowing the rewards that lay ahead? Current rents is 925 a month and I can get it up to 2375 after the losses I describe above.
Most Popular Reply
We did one..we bought the home next door & initially we got $820/mo in a 70's era SFH in very very tired shape.
When they moved after 5 years we rehabbed it for $18k & got $1400/mo & that was 6 years ago.
We did bump the rents over 2 more tenants (now $1650/mo) but the current tenants do all the maintenance.
When the 20 yr old HW tank burst at the seams they shut everything of, cleaned up the mess. They then took out the old tank, carried in the new one for me & paid their HVAC buddy to do the install to code. Great kids, in fact when my tractor was in for repairs they came by & mowed our 1/2 acre.