Awkward floor plans

[Anthony Wilson]

Hello everyone,

I recently acquired a quadplex in the metro Detroit area which is my home town but I currently reside in the DC market. Since purchasing, I have placed two tenants in the building & inherited one tenant. Two of the units have very awkward layouts/floorplans. I recently place a tenant in one of the awkward units but for $125 less a month in rent than what I was seeking plus it took 2.5 months to find the tenant. In that unit, all we did was paint, new fixtures, deep cleaning, etc which was about $4500 in cost. There is one last vacancy left in the quadplex & it is in need of a renovation (it is in much worse shape than the unit that was just rented). I am strongly considering removing a load bearing wall to give the unit much better functionality & (hopefully) have an easier vacancy period in the future. But that remodel would cost about $13,500. However, the layout would be more attractive to tenants & (per my property manager) I should see an increase in rent by about $300 per month.

My question is, is there a calculator for how much in renovation a unit is worth? I'm currently torn with whether I should do the minimum to fix the place up ($7000) or if I should make the investment & get the hirer rents in return ($13,500).

Looking forward to hearing from you all!

Regards,

Anthony Wilson

[Michael Smythe]

@Anthony Wilson seems pretty straight-forward:

$7k is minimum cost for RentReady, $13,500 with layout adjustment = difference of $6500.

$6500 / $300 month higher rent = 22 month recovery.

Typically, anything in the 3-5 year recovery range is worthwhile.

WARNING: who is going to determine how to add the proper support beam when the wall is removed? Have seen a LOT of mistakes with these:(