Quality of tenants, thoughts/experiences/comments appreciated!

[Ryan Jopson]

Good afternoon,

I am an investor/agent specializing in the Western MA real estate market. Myself and a business associate own a handful of multi-family properties in a specific location we have deemed to be highly lucrative. It is not uncommon in our niche market to see CoC return %'s ranging from 15-20%. Cap rates in the 8-10 range. Something to note: We do self-manage and typically do NOT factor in vacancy or delinquency, so this directly affects why we are able to hit such high returns. Our average 2-bedroom apartment rents for anywhere between $800-1000/month. The units are in "nice" condition and are well kept/maintained. They usually include hardwood floors, basic updated kitchens/baths, newer-white appliances, formica countertops/laminate floors, decent sized closets, etc.

We have recently acquired another 3-family investment property. We are currently in the process of a complete renovation of all three apartments. However, we went about this in a bit of an unconventional way compared to our normal business model approach. In these units we went with much higher end finishes. Luxury-vinyl plank floors, stainless steel appliances, professionally re-vamped hardwood floors, custom kitchen cabinetry, granite countertops, etc. In basic terms; we went all out!

We are looking to see if the current state of the market will support a higher end unit at a significantly higher price. We are anticipating listing these units in the $1200-1300/month range. If all goes well, we will execute this same strategy going forward with our next acquisitions. To summarize, we are hoping the higher end finishes will attract long term tenants, with a justified increase in price.

I am more or less looking to see if others have had any success with this approach to investing/rentals.

Any thoughts, comments, feedback, or insight is greatly appreciated on my behalf. Thank you for taking the time. If you need more information to develop an appropriate response please let me know.

Thank you kindly,

Ryan J.