Advice on property improvements

[Sophie Goldman]

Hi all! I’m relatively new here, though I’ve been lurking for a while. I currently own a 2-family rental and it turns out that my co-owner and I are eligible for a $30k renovation grant and we’re considering where to best spend this money.

We plan to hold our current property for at least the next 7-10 years, if not longer. The property has quite an old roof (12+ years), though the previous owner did some significant patching and repair work on it before we purchased and claimed it would last us the next 10 years. There aren't any leaks or issues otherwise. The property also needs an exterior paint job, as well as some woodwork to repair minor rot on the porch and railings. The house is an early 1900’s victorian with a wood exterior.

Finally, while the tenants pay for their electric, we are paying for the heat and hot water via a single gas boiler and a single gas hot water heater.

My co-owner and I are considering using the grant money to separate out the utilities and pass these costs onto the tenants. The heating bill is pretty high in the winter months. We were recently quoted about $30k for the work to install two new boiler/hot water heater combo units, meaning it’d eat up just about all of the grant money.

Does separating the utilities seems like a good choice here? We’ll get additional quotes as well in case this one is particularly high.

Our thinking is that if we replace the roof or repaint now, there’s a high chance we’ll want to redo this work down the line if/when we choose to sell, whereas separating the utilities will increase our profits now, as well as improve resale value.

I’d love to hear what you all think!