When and to what extent do you improve your Multi-Family Units?

[Omid Sadeghi]

Curious about your approach and strategy. I have an 8 Unit apartment building in Los Feliz, Los Angeles, CA. One of my units is now vacant. I could slap on some new paint and make minor repairs to get same/similar rent as before, or could do moderate improvements to try and hit top of the market rents, but wondering what criteria/benchmarks you all use when considering more moderate/extensive improvements. How do you decide when to do repairs vs. improvements and how much $$ to spend on improvements? Other than the obvious - raising rents - what other factors do you consider? For example, do you find patch repairs to be more costly in the long run? Or, what increase in ROI / rent do you expect when you do improvements? What am I not thinking about that I should be? Appreciate all your input and advice!

[Karl B.]

Spackle the imperfections on the walls, prime and paint. 

Is the carpet 'meh'? Then install luxury vinyl flooring. 

Simply making the flooring and walls look nice can make a huge difference. 

Aside from that, if the appliances are junk I upgrade. 

I bought a small portfolio and had to evict a guy for nonpayment a few months ago. He was paying under-market - $400 per month. 

I spackled, primed and painted, pulled the crappy carpet and put in luxury vinyl flooring. We replaced the tub surround and the fixtures and I bought a new fridge and stove (the prior tenant stole the fridge). 

Now it's rented out for $575 a month. 

In a market like So-Cal, if you do the above, you'll be reaping a lot more than +$175 a month if you do what I did.