Tri-Plex Unit Renovation

[Karl Hudson]

Hello everyone, I want to make sure I’m not over looking anything on this. So I have a triplex that was built in 1981. Over those years it has been extremely well maintained with the original bathrooms and kitchens still in place. The tenants are very happy with the way it is. However, one apartment has become vacant. The tub is on it’s last leg and needs to be replaced. The kitchen, although it’s been well maintained, is starting to show it’s age. It’s not real wood like in most 70’s kitchens. It’s the compressed wood from the 80’s. So unfortunately we are unable to just spruce them up with new paint and fixtures. I’m debating on a complete renovation of the unit, new kitchen, new vinyl plank flooring, a mostly new 1.5 bathrooms, and an interior paint job. We would be looking at $11,400. Currently the apartments are renting for $1,025.00. With the renovations I believe I can list it somewhere between $1,250 to $1,400 a month.

#1 Is this a good idea? Should I do minimal repairs vs a more full on renovation?

#2 I have plenty of cash on hand but would like to stay as liquid as possible for any possible deals. Should I finance the renovation or just pay cash for it? Monthly payment on that would be around $188 a month.

I’m thinking this will also raise the value of the property which already has a significant amount of equity in it. In the three years since purchasing it, the equity almost now equals the price I paid for it. Any thoughts on this appreciated.