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Updated over 5 years ago on . Most recent reply
Just bought two duplexes, rent prices all over the place
Just bought two duplex that are on adjoining lots. Quality of the units also vary.
Each unit is a 1/1. Two Buildings. 4 Doors.
All numbers are after capex savings, management, etc.
Need a strategy to get them all inline a little better with their value and the market.
Units:
A. Average Quality Unit renting at appropriate market rate. Rents for $500 tenant with a lease expiring in August. Gives me > 12% annual return on my money. 5k and I could get a market rate of $600/month. Plan to leave tenant alone and not upset the balance as new owner. Will make upgrades to increase rent if tenant doesn't renew otherwise only small yearly increases and small property upgrades to try to keep them happy as is for now.
B. Nice old lady, been there for 25+ years. Probably never had her rent raised. Month to Month at $370. I'm losing 2% annually. Would need a significant rehab to bring her unit to market. 10k and I could rent for more than $600/month. 5K I could get it to $500. Need to raise her rent regardless. Feel terrible about it must happen. Might trigger a move and she is my biggest focus. If I am triggering one move, it must be this one for cash reasons. Advise on strategy to give her time but not too much?
C. Nice Unit. Rents for $445, tenant has just signed a new lease a few months ago. 6% annual return. Will need to increase rent later. But in the mean time...has 5 (FIVE!) small dogs. She maintains her apartment and dogs are in cages or outside, but the place smells like a kennel. She is technically breaking the lease as it states no pets, but nothing has been enforced by previous landlord. Plan to move towards pet rent and limit to two total pets in future but I'd be happy getting her to two dogs first. Then worry about pet rent on lease renewal. Give her options to rehome some of the dogs?
D. Nicest unit. Renting for $475 month to month. 9.5% annual return. Could rent for $550 with no investment in unit. $600 for minimal upgrades . Not rocking the boat. Going to get the tenant on a lease with a minimal rate increase to lock in for a year.
Thoughts on your strategy for my motley crew of units?