Rehabbing Existing Property With Tenants

[Ron Steele]

I'm considering "rehabbing" or improving about 76 units that I own which is a portion of my older portfolio. These properties have been good cashflow properties, but they are more maintenance intensive since they are older. They are about 90% occupied.

I was considering the following:

• Replacing all flooring with vinyl plank except for bedroom (add new carpet when needed)
• Painting all units 2 tone colors
• Replace appliances with new appliances that come with 3-5 year warranty
• Change p traps and plumbing under sinks (Noticing more leaks and stop ups)
• Change all filters (should be doing anyway I know) 
• Resurfacing Tubs

I could increase rents on the property but I would only do so for my problem "late or non paying tenants" so the move would be a value add/bulletproof to reduce maintenance.

Anyone have any other strategies or suggestions? Is this over improving or should be done periodically anyways?

The properties are all about 35-50 years old.

Also should I finance these through cashflow of the properties a little at a time, Refinance some existing equity that I have, or go to the bank with the rehab plan and show a higher appraisal resulting in higher rents. My rents are about middle of market for my market (some a bit below)

Thanks for you help

[Ron Steele]

Thank you for your response.

I was going to do all repairs while the property is being occupied. You are probably right on the flooring and painting. Do you think I should wait until those items go out or should I go ahead and replace them?

In my experience with my tenants, its a slippery slope replacing thing, even when they break. What I mean is if I replace one tenants refrigerator or stove with a new because it legitamitely goes out, others will get jealous and I will have 15 that need to be replaced the next day. Funny how that works. 

Maybe just the disadvantage of lower income rentals. Most time you really have to treat a lot of tenants like children. Hope it doesn't sound demeaning just my experience in a short career.