Improvements to add value

[Ben Zimmer]

Hello all, I am a beginning real estate investor who purchased my first investment (a four unit apartment building in Omaha, NE) property in September of 2012. I had plans to use the income from my previous job to invest in more properties to get a good start and take advantage of my young age. However, I have decided to pursue my goal of becoming professional pilot and have since gone back to college / taken a much lower paying job. Because of my current circumstances, I don't think I'll be able purchase any other properties in the near future. Instead, I would like to focus on updating my current property to add as much value and get it squared away so that when I am in a position to purchase more I will not have to worry about this one. Overall the property is in good shape, however, both the plumbing and electrical are fairly dated. I am looking for tips on how to prioritize my laundry list of improvements. Any questions are welcome and any suggestions would be greatly appreciated!

[John Chapman]

Are you planning on flipping this property or holding it for a long time? I guess what I'm getting at is, why are you looking to increase its value? Is it underperforming? Or are you just looking to "harden" it so it's maintenance free? If it's the latter, then just wait until stuff wears out and upgrade. For example, if you've got carpet, wait until it's used up and then go back over with vinyl plank or whatever. I've been doing this to a fourplex for about three years now. About once a year, a unit will go vacant and I'll remodel the unit.

For me, the biggest thing to harden is the flooring. It's also the fairly expensive to do it right, but once you do, it really minimizes the make ready costs every time a unit goes vacant. Without knowing more about plumbing and electrical, I wouldn't do anything about it, unless you've got a Federal Pacific Electrical box or something dangerous. I certainly wouldn't remove functioning equipment.