Air Conditioning System Upgrade in 4-Family Rental.

[Samson Kay]

FIRST POST!

Hi Everyone. Looking to get some opinions. I recently acquired a 4 family home and was trying to determine what kinda of capital improvements I can do to the property short term that can add value to the home as well as justify a higher rent price.

I've looked at every apartment listing in a quarter mile and have determined that the main thing they all have in common is a dish washer (which I'm ok with installing) and a Airconditioning unit.

Now the apartments all have a separate central heat system and ducts. Do you think it would be worth it to upgrade the unit to supply airconditioning as well to make my apartments nicer? Do you think its worth the money? Will the house appraise for higher with the upgraded system if I were to put it back on the market in 5-10 years?

Thanks for your insight!

[Jeff S.]

I think you are on the right track offering similar amenities as the competition. That would justify market rents, but above market rents is a different animal. Are your rents at or below market as is? Do the tenants pay their own utilities?

I think a capital improvement like a new A/C would benefit you more through depreciation rather than appreciation. I'm interested to see what other investors have done to command higher rents too.