Rental turnover - Remodeling kitchen /bathroom

[Sachin Maskey]

Hi All

I own 3 unit multifamily in providence, RI .My current tenants just moved out and i am looking to upgrade few things in the unit.

 I am looking for suggestion and remodeling contractors to upgrade my current kitchen, bathroom and few areas of house so that i can increase the rent and value of the property . Any suggestion how to find the best remodeling contractors and if this is something i should do to increase the value and rents ??? 

What should i do to upgrade the kitchen/bathroom and other areas of the house on budget and on time??

Thank you

[Anthony Thompson]

@Sachin Maskey there's the old saying that kitchens and bathrooms sell houses, and they rent them (and apartments) too. So obviously that's where to focus.

As far as how to prioritize your funds, I'd say first focus on what's "wrong" with then units/kitchens/bathrooms, what makes them sub-par and would turn people away. Then once you've addressed all those items in your rehab plan, you can move on to how to improve the units to make them more attractive.

There's an implication here that you need to know what the other units in your area are offering as well, so if you're looking for ideas of what your units need or could benefit from, I do recommend checking out the competition. After all, your potential customers (i.e., your future tenant applicants) will be doing that, too.

As far as finding contractors, it's definitely tough these days. Most of the good ones I know are booked months in advance and it's hard to even get a call back if you don't have an established relationship. I'm a big fan of asking other investors for referrals but I still think most good ones are slammed these days.

It does help if you know which specific trades you need though, and are willing to manage them yourself rather than looking for general contractors to manage everything for you. Also be sure to tell them where the property is located and try to choose contractors that are based close by.

You'd be amazed (or maybe not) how many contractors don't want to drive more than 20 minutes to a job here in RI. In a tougher housing market they might have to, but not any more. So try to take that factor out of the equation (e.g., if you know someone's based out of Narragansett and the property is in Providence, you might try finding someone in Providence or close by instead).

I can probably help you with specific tradespeople but I don't know any GCs who have any real availability at this point. As to whether it's "worth it" to upgrade, if the upgrades fix problems or visibly make the unit better and you're going to hold the property for the long term, yes it's usually worth it. You'll make the money back on higher rent and higher resale value when you do eventually sell. It becomes tougher if you're only planning to hold on for a few years, then you really have to pick your battles.

Again when trying to prioritize improvements, put yourself in your tenants' (customers') position and ask what features they'd pay more for and use that as your guide. For example, if most buildings in your area have on-site laundry but you don't, it might be something you should tackle early on just to keep up with the competition.