How to/best ways to raise rent after tenant moveout

[Jason Holden]

The following is a situation faced by a family friend and I was wondering what tips or advice we could get from the BP community. We'll call the home 111 Fox Rd.

Fox Rd is tenant-occupied and their contract will end next month; they don't plan to renew. The owner is taking this as an opportunity to do some updates and increase rent for the next tenant. Nearby comps can rent for $0.10/sq ft more than 111 Fox Rd.

The question is: what updates and upgrades (over and above maintenance) typically see a good return in a rental unit? Appliances? Kitchen and bathroom updates?

The property currently cash flows per the 50% rule and the owner plans to keep the home for at least 2 years, if not the next 5 or 10.

[Nicholas Cook]

@Jason Holden, upgrades to the kitchen and bathroom as you suggested are generally worthwhile, but what you upgrade things to depends on how long they plan to keep the property and where you believe the neighborhood is trending based on your time horizon for ownership.

If they plan to keep the property long term, better quality upgrades make sense if the market can bare the premium being charged.

I also agree with @Ryan Scott Isacksen, that nicer properties that are clean and have strong cosmetic appeal will attract better quality residents which has a significant impact on the bottom line over time.