All Forum Posts by: Asha Carpenter

Quote from @Asha Carpenter:

I recently acquired a two family home: 1 bed/1 bath and 3 bed/2 bath. Across the street, a brand new apartment building are completing their build and rentals will be available in April. Their rental prices are: 1 Bedroom from $1695, 3 bed and 2 bath from $2600 meaning my rental prices will have to be significantly less.

The area has a lot of potential but not developed as of yet. The multi-family is in good shape just needs a bit of paint and the floors need to be sanded. However, the kitchen could do with some upgrading. Even with the upgrading, my rental income will still be capped (1bed $1500, 3 bed $2300). Appliances will be upgraded.

Do I spend the money now and upgrade the kitchen even though it won't increase my rental income or should I wait until the area has developed more so the money I invest in the kitchen will actually give be a better return in my rental income?

 No.

You spend only six months BEFORE you plan to sell. If you rehab now the tenant would destroy your nice home anyway

 I think that’s a good idea with the oven, try to have it match the microwave too if you’re going to instal one. 
and for colors like I said maybe see what people are liking and what is being done in your area. The most recent project I did was in a more rural area and so I chose a nice looking green cabinet color with black countertops. I’ll message you a picture so you can see how that looks.

What are you thinking of doing to the kitchen? Any way you could meet in the middle and to a light remodel? Maybe just refinish the cabinets, and go with a new countertop and updated appliances. Look at some local trends for colors, or what the building next door is doing, and give the people what they want without breaking the bank. Doesn't look like it needs much.

P.S Something I also like that is pretty good bang for your buck is installing an over-the-range microwave. It frees up countertop space, looks good, and can vent right out through your hood fan ducts. 

Best of luck!

 Another thought Asha is the rolling islands you can buy at your box store to add some countertop space for cheap. Match your cabinet color to it and you have a more user-friendly kitchen. May not increase your income by much like you said, but could decrease your vacancy % and look nicer in pictures. Looks like you have the room for it. 

 Maybe you could keep the white range black fridge combo and make look like it was planned.

That looks like a nice ADA range.

Maybe put the range and fridge on the empty sidewall as an L kitchen.

In this mockup the uppers have no doors (not everyone likes this) with a drop down wall, and the lowers are a larger width (more $$).

But this seems to control the space better, especially the upper space.

Will it rent for more (???) maybe maybe not.

Will it compete against the new apartments better--maybe, maybe not, you should go look at what they offer.

It's just an idea off the top of my head.

 Good Luck!     

You're not getting 20% CoC on anything if you bought in the recent months. So throw that nonsense hard cap number out of the way. STRs you might be after year 1, but unlikely unless you hit an absolute home run. It's an extremely minute chance you're getting such a CoC return today or the in the last 6 or so months. If you have, prove it. Everyone loves to talk about their ROI, CoC, and other crap and don't relate it to TODAY'S market. If you got a target rate, and you're suggesting it as a benchmark as advice show how you've done that within the last 12 months ideally 6 months. It's hot garbage otherwise.

Let's stick to today's world, rates, environment and everything in between. @Asha Carpenter it depends on your current financial situation. Do you have the ability to renovate moderately right now without tapping into reserves or disrupting cash flow? You notice this is something you're going to have to do in the upcoming years. It's not going to come cheaper, but if you're not necessarily fit to do a reno right now it's not necessary. If you are fit, I would do it as the earlier is better. Your income will be capped in the short-term, but long-term you don't know. You've more or less got a designated floor and you're not going to have to worry about doing it later when you HAVE to and cost yourself vacancy. It's kicking the can down the road if you have the means to right now.

Dont compare a house to an apartment , They draw different renters .  I wouldnt upgrade till its necessary . 

I would not spend money that does not make you more money, unless you start to have an occupancy problem. I need to see 20% CoC returns to pull the trigger on rehabs where there is not an occupancy problem.