Bathroom Remodel in Occupied Unit

[Cory Kerr]

Greetings! Hope everyone is well. 

A tenant in my 3 unit reached out about a leaking shower head, low water pressure, getting water for the tub reconnected(it has the old setup with 4 handles with 2 going to shower + 2 for tub spout), and refinishing the rusting tub which the prior owner did every 5 years.

I've had the property for 5.5 years, and besides upping rent since I acquired, I haven't raised rents. To make the repair I'll need to demo 2 of the walls, replace plumbing, put the walls back up, tile the shower, and get the tub refinished. I want to just demo the unit I occupy(having a different plumbing issue & will need to open my bathroom ceiling) as well as the one the with issues and redo all the plumbing except for the toilet stack while the walls are down.

Tenant is a good tenant, at times pays late w/late fee but always gives a heads up. Is it better to just demo the bathroom and update(floor, paint, fixtures, vanity, etc.) then go up $100-150(still well below market) or only replace what was asked and rent stays the same? 

Would it be better to ask what she wants to see if she can afford? Will I have to accommodate during repairs or just see if she has somewhere to go? 

Thanks!

[Nathan Gesner]

I recommend you do the complete renovation and get it over with. This is hard to do with a tenant occupying the space, so I would recommend you use this as an opportunity to get her out, renovate the unit, then rent it for market rates.

I suspect you're at least 25% below market. If market rate is $1,000 a month, that's a $3,000 loss per year. Three units at that rate and one year of lost income would probably pay to fully renovate a bathroom.