How much value can improvements add to a rental?

[Phat Dao]

How much value can building a garage add to a property? I've found a rental property that is a 4B/1.5Bath/No garage but there is parking at the rear of the property with footings to build a garage. It is currently sitting on a corner lot from a local college. Currently renting at $1300, asking price is $159,000. It is an older home built around the early 1900s so everything is all natural wood. How would you go about adding to the value of this home if you were to purchase it? Would you switch out the flooring for LVP and update everything so it is more modern or would you leave it as is?

[Kevin Sobilo]

@Phat Dao, most improvements you hire a contractor for LOSE money and a garage is probably one of the worst tbh.

You might spend $20k on a garage that might get you $50-75 more rents and add $8k in value to the home.

You can make money on improvements if you buy something distressed or in much more dated condition than surrounding homes, but if you buy an average home in a neighborhood and do alot of rehab, you are demoing value to try to add more and often the numbers won't support it.

I would look at what the norms are in your area in terms of features and condition and then look for the EASIEST things you can do to bring your property to be in similar condition. That way you have something to aim for and have an idea of the value you will create.