Need advice: Recommended renovations for higher rents?

[Michael Orlando]

Hello friends!

So I am considering putting an offer in on my first property (a duplex in the Cleveland, OH area) and have a little issue..

The area has very high taxes which tend to be over 6K a year. When I ran the numbers, it was hard to get this deal to make a lot of sense from a cashflow standpoint. However, if I can get it for a solid price and raise rents a bit, it would make sense. It's close to a couple of colleges, in great shape, super clean, just slightly dated. 

One unit is currently rented for 825 but I think the tenant is actually paying slightly under market rent for the area as she knew the owner who lived in the downstairs unit, but passed away. Market rent for this area and unit type seems to be around 875. I'd like to get 950 or 1000 per unit if possible. These are 2 bed, 1 bath units. 

There is older carpet through out, a pretty dated kitchen (but very clean), and dated, but clean bathrooms. I'm leaning towards doing some vinyl plank flooring through the units, kitchen cabinets and new tub and toilet. I guess I'm looking for advice and what tends to add the most value in tenants eyes and if I'm on the right track. If so, does anyone have recommended materials/brands for the renovations that they tend to use over and over for certain reasons?

Thanks!!

[Robert Matelski]

What is the assessed value relative to what you are paying for the property? If you do not know, you can check here: https://myplace.cuyahogacounty.us/

If the price you are expecting to pay is well below the current assessed value, you'll likely be able to successfully dispute the valuation (and get the taxes lowered accordingly). When I run numbers on a property that has an assessed value far higher than what I am paying for it, I do two sets of calcs... one is the cap rate as-is, and one is the cap rate based on a new (lower) tax valuation. Hope this helps.