Renovating apartments - is it worth it?

[June Veenstra]

I own multifamily buildings with a lot of vacancies.  In order to get the vacant apartments back on the market they need extensive renovations.  I've done the calculations and it totally pays to renovate in towns such as North Bergen that will let me increase the rent 50% above the last registered rent (these are rent controlled buildings)if I spend $8000.00.  Where I can't raise the rent I'm thinking it doesn't pay to do expensive rehabs especially where the rents are artificially low.  The low rent property is in Union City.  I'm thinking just spend the minimum amount to get them back on the market .... nothing fancy.  I'm thinking that if the rents are way below $1000 per month than keep the apartment basic... nothing new if possible.... just clean, repair what's necessary and make it functional.  Where the rent is above 1000.00 a month I might pop a new kitchen or bath in because I will make back the investment in a year.  Thoughts?

[Deanna McCormick]

How long have YOU had this building,,  lack of attention to the vacant units was just plain poor business so good your turning it around. 

Get the vacants up and running,, do as much as your pocket book will permit,, work and get units done and ready to show 1 by 1 so your not spread out working on several and not getting any thing finished. Focus on I need this apartment done by the XXX so you have it rent ready.. Start showing as soon as feasible. 

Focus on main elements,, If the cabinets are worth saving Paint them, make sure plumbing and heat is working and the main source boiler is working.. Flooring keep simple no carpet if you can. Bathrooms eat up a big chuck and if the wall tile is decent you can respray the tile and it will look great, and respray the tubs. Paint goes along way,, pick a neutral color and use it in all the units,, 

Your contractor may have great ideas but the key is to work within your budget get the units done one by one and rent ready every day they are down your loosing money.. Keep close watch on what's getting worked on, and your receipts