One unit at a time or Rip off the bandaid?

Question

I have a 20 unit complex that is C- in a B area.  I raised the rents for all of the units and as hoped for, a few moved out.  I want to redo the units and go up on the rent even more.  My fear is that the current tenant mix will potentially keep away the type of tenants I was hoping to transition to.  If I can afford it, would it make more sense to empty the whole complex and bring them all up to what I want them to be?  Only problem there is it would flood the market with new apartments and I’m not sure 20 people are looking at this time.

Reginald Dave · Answer

I had the exact same situation. I bought a 20 unit (C) class building. Only difference is I raised the rents to where I wanted it to be after updates, & most of the tenants wanted to stay. Not only did they agree to stay with an increase of rent of about $175.00, most did not even want any updates !!!!

Jeffrey Donis · Answer

@Thomas Willingham I agree with @Charles Carillo. I would avoid being 100% vacant. This is risky. Instead, you can leave tenants in place and update units as you go, which will allow you to implement your business plan overtime.

Charles Carillo · Answer

@Thomas Willingham

I would stat renovating vacant units and then simply non-renew trouble tenants and offer good tenants upgraded units if they are interested.

Bryan Mitchell · Answer

@Charles Carillo, I agree with this. It’s the safe bet. I look for properties that are already cash flowing and upgrade as we go. It’s a slower, steadier process, but I sleep very well at night and build forced equity as part of my long con. Also, you can perfect your technique with minor tweaks here and there by doing one unit at a time. Document your progress and more unforeseen opportunities will come.

One unit at a time or Rip off the bandaid?

Most Popular Reply