How to do rehab while there is a tenant there?

Question

Hello BP so I revently bought my first property and there is a tenant already there, so I think it's a good thing since I can have some cashflow coming in.

For this property I had already paid it all cash from my own earnings and now I'm trying to rehab it, utilizing the BRRRR method. Now how would one rehab while a tenant lives there. Should I put it in the lease that I will be rehabbing while they live there? Would the tenant be happy if I fix up the house they live in?

Russell W. · Answer

During pre-covid times it was a bit more feasible, though not easy, to do work while the unit was occupied. Now with more people at home (although that seems to be changing) it makes it much more difficult. It really depends on what type of work you're having done. If a new bathroom, is there a second bathroom tenants can use while the other is out of service? If a kitchen, how do you ensure the tenants have a functioning kitchen during a renovation? Cabinets and countertops can be a one-day install if scheduled properly. It all depends on what you're doing, if the tenant is home during the day, and whether or not you want to deal with the coordination. One option I've heard before is to offer putting the tenant in a hotel or Air BNB for a week or two while renovations are taking place, and pay for that cost. You get the renovations completed and the tenant comes home to a nice, new apartment. Just something to consider.

Jody Sperling · Answer

We have no issue doing exterior rehabs and landscaping while a tenant is in place, but it can be difficult to rehab an interior while a tenant is living in the space and you would likely want to hold of on anything short of emergency repairs such as a water heater or HVAC replacement, floor, ceiling or wall leaks, or mold.

If these elements of the house are sound and you got a good deal on the house, you should have no issue finding a bank that will refinance the loan. Best of luck to you!