incomplete renovated rentals can still bring in money

[Steven Maduro]

Ok things happen right?

unexpected expenditures may mean that your renovation is off schedule by about 6 -8 months

What do you do?

You can leave it vacant until you have the money to renovate.

You can do a cheaper renovation which may save a month or two.

or you can do what I did.

you can rent it unfinished. at 60% of your normal asking price.

There are many people who would love to save a few hundred a month

all they need is a working toilet and a microwave and a small refrigerator. and hot plate and toaster oven.

I floated this idea a year ago and I have learned some things about the process that make it a lot more do able.

What is entailed?

you should have a place that is at least structurally sound and safe.

take care of leaks, faulty wiring.

you can rent the place to a handy man or contractor type dude

you can even let them work off their first month rent

by painting the entire place. A job that is easy enough for most handymen.

You are looking for a person who is moving into town and needs to get a feel for the lay of the land before committing to a lease. or someone who is content with living beneath the status quo until they get back on their feet.

The advantage is that you get to earn some money toward your renovation and your property is not vacant and exposed to vandalism or looting

The disadvantage is that you will run into a pyschological phenomenon that is difficult to get around. No one wants to pay more for something they have enjoyed at a discount no matter how much improvement has occurred.

Basically you need to keep this sort of rental as a month to month deal.

This is very important because the tenant is a short term tenant.

They are usuallly too smart for their own good. if they are clever enough

to spot the advantage to this situation they think they are clever enough to

get more from you than you are willing to give.

They will end up problematic in the long term. but in the short term they work out really well.

Keep them to 6 months maximum.

especially when you go to increase the rent after the renovations are complete.

To me the good out weighs the bad when you are in a cash strapped position

I have employed this strategy four times.

I have found that at bare minimum I have managed to pick up a few thousand to put toward a renovation.

I never found a great tenant that I would want a long relationship with.

I managed to improve two properties using this method

and I will use it again.

this is what I have learned.

Do get people who know a thing or two about building houses.

always be there to inspect anything you let them do.

let them know that you will be around to inspect the job

during and after its completion

go over all of your details prior.

Never let them do any repairs without your consent.

let them know this will be grounds for immediate eviction.

Always set time tables

never never make promises about what you will do

never make statements about you want to do

never make statements about what you wish to do.

keep the lease to a month to month

or 6months at a maximum.

Do attach a rider to your lease that

releases you from any liability in case they get injured on premises.

Thats all people.

this is an emergency solution not the ideal solution.

I am not recommending this as a first course measure.

but in those situations where you may have thought about leaving a property vacant until you can get around to fixing it up