Related Posts
Additional Posts in The Real Estate Bowl
Can I get a commercial loan without 25% down?
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
That was just a preview…
Sign Up to see all discussions
Sign Up to see all discussions
- Discover what it’s like to work at companies from real professionals
- Get candid advice from people in your field in a safe space
- Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.
"" is an unusual email domain. If correct, please proceed to the next step
Messaging rates may apply
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
New to Fishbowl?
Download the Fishbowl app to unlock all discussions on Fishbowl.
Share
Embed this post
Copy and paste embed code on your site
Preview
Download the
Fishbowl app
Scan your QR code to download
Fishbowl app on your mobile
Sign up for free to view this conversation on Fishbowl
Sign up for free to continue using Fishbowl
Messaging rates may apply
f quotes are 50–70K, I’d seriously consider phasing it (start with the worst bath and flooring) or doing more modest upgrades so you’re not over‑improving a rental beyond what the market will actually pay you back for.
Depends on your long term goals / how much it would increase the properties/value/rent
If you bought the property at a good price, you’ll make your real money when you sell it, not so much when you rent it (for this type of property, at least). Rent is good money, but that’s really there to keep the investment afloat while you compound that appreciation. So, if the $50-70k increases the market value of the property, it might be a good investment. You just won’t see all the benefit of that investment until you sell the property, though you will likely get improved rental income if you’ve done your market analysis correctly.
It comes down to what cash you have on hand, whether you’re willing to take on renovation debt (or sacrifice liquidity), and what your investment goals are with this specific property.
You could do some financial analysis like ROI calculations (before and after renovations; don’t forget to include profit from both rent and sale of the property). Another is a break even analysis. If you discover the renovation investment won’t break even until year seven, but you planned to sell in 5, then it’s not a good idea, but if you planned to sell in 10 then maybe it is.
It’s tough to give advice any more specific than this without knowing more about the property, the local market, and your goals, but this sounds still point you in the right direction. Best of luck!
To answer the last part of your question more directly, some flippers spend well over $100k renovating properties like yours. The only difference between you and flippers is you’re deciding to take on tenants between purchase and sale. But again, I couldn’t give you specific recommendations without knowing more.
Coach
How much will rent increase each month? How much will ARV increase?
Is there a middle ground where you can make some improvements now for a cheaper price to get some increase in rent, and then make more improvements when you have the next vacancy?
If $50k in improvements gets me a $200 increase in rent, I’m not doing them. If it gets me a $500 to $700 increase, I might.
For a rental, you usually want projects where you can reasonably get most of the cost back in increased value or rent over time, and bathroom updates can have decent ROI when done midrange, not luxury.
$50-70k for three baths is honestly not bad, if you’re talking about a full replacement of all the major components (flooring, tile, fixtures, paint, accessories, & labor for all). If you can do it using equity, that’s a better idea than using your own savings.