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Updated over 5 years ago,
What would you do with this property?
I recently bought two 4plexes for a pretty sweet deal. 100k. Both are in a small town which is why I got the deal, and are mostly 1/1s. Both are converted SFH and have a single meter, so the old landlord was paying for utilities.
The rooms rent on average for 450 and utilities cost 150, so I'm bringing in 300 per unit. 3/8 are long term occupied and the rest appear to be transient/ month to month. I'm considering several options to improve cashflow.
1) Split meters and tenants pay utilities: this would be a huge boost, even if I just did electric, which is currently costing me 75 per unit. However I have read that splitting meters can be expensive, up to 5k or more per split. To split just 6 electrical meters I would spend 30k.
2) Improve efficiency to reduce utility bills. The houses are old (1900), and I feel some small changes like LED bulbs and solar panels could go a long way. Not sure what the long-term ROI is on these, though.
3) Convert to duplexes. It seems crazy, but if I were to knock down some walls, I could convert them to duplexes, charge $600 + utilities, and attract higher quality long term tenants. And I would only need to add 2 sets of meters vice 6. I could also do more value-add like fresh paint, professional photos, etc to raise the rent in a 2/2 situation where in a 1/1 I think it would be much less likely.
Your thoughts?