All Forum Posts by: Elbert O.

Hey @Elbert O. - I think @paul de luca summoned up my thoughts....use the data first to determine the right move, but my hypothesis is below....

I would for sure go with the kitchen and bath!  While window units aren't ideal it is acceptable here in Chicago.  I'd wait until you can do a full forced air system with a condenser instead of mini splits.  Everyone thinks mini-splits are the way to go until they do some serious research on them.

When I am making these decisions, I like to base it on imagining I am about to move in to that unit and what would be more important to me. 

Aloha,

If the building is 100 years old, and you already know that some significant wiring will need to be run for AC, odds are ALL of the wiring needs to be updated. Rather than risking overloads and fire due to who knows what kind of repairs and extensions that have been done over the past 100 years, I would look at updating the wiring completely. Old systems can be constant problems due to the sheer amount of electrical gadgets and small appliances found in most homes. This can affect your Tenants, potentially damaging their modern electronics.  With knob and tube, it is not uncommon to find the wiring incorrectly connected to romex with no attention to correct polarity, and of course you have no separate ground which is your primary safety path. Troubleshooting old systems can be time consuming. Correcting improper wiring is also time consuming. Better to completely update now, preparing for AC and other upgrades 2 - 4 years in the future.

Your Insurance company is likely to require an update at some point, better to do so on YOUR schedule. A properly permitted upgrade with new panels would probably actually lower your premiums if it does currently have knob and tube in substantial areas...or old timey fuses.

You can look at other options for a shorter term cosmetic update of the bathrooms and kitchens to help increase rents. Budget for a long term upgrade over the next 3 - 5 years.

@Elbert O. The question is "how much will the rent increase?".  

The way to analyze this is to consider the cost to renovate. Then how much will the rent increas for a years time. If the rent will go up $125 a month, that is $1500 a year. That mean your return on investment for the $15,000 AC , gives you a ROI of 10%

15,000 cost/1500 year income = 10%

You need to get a better handle on how much the AC will really cost. $15,000 seems really high to  me also. Then a better handle on how much the rent increase might be. Personaly I would want a much better return on my investment then 10% for renovations. 

@Elbert O. I would ask the PM which will bring a bettter ROI. You can put in a few window AC units for a lot less then $15k. Is that acceptable in your area? It is in Baltimore.

Thanks Zachary! Any recommendations for a real estate agent?