Market for rent before renovation is complete?

Question

Happy Monday BP!I'm nearing completion on the renovation of my first house hack duplex project. The other half will be ready for rent in the next 2-4 weeks I'm estimating. I'd like to start marketing the apartment for rent to start the tenant interviewing and application process. I'm hesitant to post pictures of the current status since it's in construction, no flooring, trim, shelving, appliances, etc. I also don't have a lease developed yet, focusing on the renovation lately. Would you recommend posting an online ad without pictures to gauge interest in the property? Are no pictures better than in construction pictures? Is it worth interviewing potential tenants before allowing them to tour the property? I would think it makes sense for tenant and landlord to tour the property once it's 95% complete at least and not before. Maybe without the trim and some of the finishing touches? Or should I wait to show it until it's 100% complete and move-in ready?Thanks,Andrew

Natalie Kolodij · Answer

Another viewpoint: Once you're advertising and marketing the rental it becomes "in service" This can mean another month of depreciation deduction for the year. It can also mean we could potentially expense some items/repairs vs. NEEDING to capitalize. Tax wise- advertise.

Megan Phillips · Answer

I would show pictures mid construction, but perhaps wait until flooring is at least down, that would make it look much more finished. If it's not complete in the photos, let them know it's being "completely renovated!" and give the laundry list of updates. Say you won't show until X date (sometime closer to completion) but that interested parties should fill out the application/information ASAP. If you give a hard date of availability (Dec 1st?), make sure it's going to be ready! Take good photos, lights on, shades open, etc. I'd go hard on the tenant screening for the first one, so it may take you a couple weeks to sort through people and get references etc anyway.Also - look on CL or wherever you're posting it for other ads of the same type, to gauge pricing and expected amenities. If you buy @Brandon Turner's book on managing rental properties, it has TONS of extras like leases and pet addendums and other document (on top of just useful info for beginner landlords) - just have them looked over by an attorney to make sure they are okay for your state.

Andrew S. · Answer

Great tips and great podcast @Mandie Holmes. Thanks everyone, I'm going to post it online without pictures to start gaining interest.

Austin F. · Answer

No harm in listing it before it's done, it generates interest that you otherwise wouldn't have had. I've found if you tell people you're renovating they're more interested in the physical space rather than the shape the property is in during renovations (are the bedrooms big enough, what does the kitchen look like etc). I also like to have most of the choices made by then so I can say "this flooring will be going in those rooms" etc. Worst they can say is no, and if they do say no you probably wouldn't have gotten them by waiting.I don't post during renovation pictures, and I do remove all during renovation adds, and post post-renovation adds immediately upon completion.

Pat L. · Answer

I had a 2 bedroom stripped to the studs. Pex/PVC plumbing & new wiring runs all over the place. The wall between the bathroom & kitchen was gone & all the floors were bare plywood. But a mutual friend had a young family desperate for the school district & they hadn't had hot water in their current apartment for several weeks. Against our better judgement they looked it over & that day we escrowed 1st. last & security, giving me <26 days to get it done. They are great tenants & 3 years later they're are still with us.

Mandie Holmes · Answer

@Natalie Kolodij I was just going to suggest just this viewpoint. Check out the Real Estate CPA podcast episode on the "BARRRR" method for an explanation. It's very detailed. It's episode nine here: https://www.therealestatecpa.com/podcasts/

JD Martin · Answer

I wouldn't bother until you are "substantially finished". In my rehabs, that means all hard surfaces are complete and supplied appliances and fixtures are in place. I will show a place when we're talking about still lacking trim & door painting, shoe molding, cabinet knobs, finished outdoor landscaping, replacement door locks, caulking, etc. All sinks, toilets, counters, flooring, wall painting complete. Since all of my properties are essentially new rehabs from the beginning, I want the property to "look" new when someone comes in, and they can see we're just finishing up some minor details. The few times I've let people see a unit in progress, they ended up not being tenants anyway or couldn't see what the finished product was going to be. It was a waste of time and counterproductive.

Patrick M. · Answer

@Andrew SchraderI have run the gamut. I rented one apartment when sheetrocked and with only a plan for the kitchen. That was by happenstance.Generally I post online when I have laid the flooring and the kitchen cabinets and granite are in place. Maybe a couple days before I will put up the plans. There is still a lot to do, but at that point my timeline is set and I know when my move in day will be. As molding is completed, appliances installed, tile work done... I will post to Zillow et al. and the shuffle the pictures around. This drives viewing interest and they see the direction you are moving. I have always had a tenant when expected.

Matt K. · Answer

2-4 weeks can easily turn in 6 weeks seeing as we have thanks giving coming up ..

Jim Cummings · Answer

@Andrew Schrader. Nothing wrong with trying to have renters ready to move in shortly after it's ready. I would be somewhat vague about when completed at this point. if you are a couple weeks out, you could show - depending upon what's left to do! As long as you felt comfortable painting a mental picture of what the final product will look like. I would caution about committing to a specific date until you have everything covered. Something on back order, could set you back.Good luck and Go for the Gold!