Inheriting an Apartment Complex in Riviera/Westchester

[Megan Wilkerson]

I live in Orange County and I'm inheriting outright a 10 unit apartment complex in the Riviera/Westchester area of Bakersfield near downtown. I was planning on selling the unit, but after doing some research I decided to keep the property, fix it up a bit, and hire an excellent property management company. From what I've read/seen, this area is pretty nice with a mix of churches, doctor's office, and cute older houses- some of which have been converted into professional buildings. The surrounding houses and buildings in the neighborhood look to be in good condition. According to Trulia, this area has the lowest crime relative to the rest of Kern County- I hope this is true. Zillow says the area is expected to increase in value 3.8% over the next year. 

I'm going to see the property in-person this week. I've seen pictures of the exterior of the building and the inside of some of the apartments. The outside is pretty rough but could be vastly improved with a nice paint job and some landscaping, which is the first thing I plan to do. My question is: for this area of Bakersfield, if I make certain improvements, do you think I would be able to attract better quality tenants and charge more for rent? 

Currently, the renters are paying 740/month. I don't plan to raise the rent on current tenants, (especially in the time of COVID) but I'd like to be able to get the rent up to $850+/month and continue to improve & increase the cash flow over time for this building. I have MANY ideas for how I can improve the apartments, but I don't want to get carried away and overspend. What improvements do you recommend for the inside of the apartments to make this possible? I don't plan on doing any demo at this time, only cosmetic improvements to clean and modernize the space. I plan on painting the walls and cabinets, adding a kitchen backsplash (probably peel and stick), updating light fixtures, and hardware on cabinets. The flooring is in decent shape from what I see, although I would prefer to not have any carpet. 

I'd also like to add some additional storage and functional decor for the tenant such as a decorative cover for the wall AC unit (it's an eyesore), a cabinet over the toilet, a kitchen cart for more counter space with some floating shelving above, corner cabinet in the kitchen- all would probably be from IKEA. Do you see these kinds of improvements as an asset or a liability? Do you think it's silly to spend money on these things or do you think it will help me get better quality/paying tenants? 

Here's some additional background on the property:

• Built in 1968
• Appraised at $660k in May 2020 - was appraised a little over 2 years ago at $464k
• 10 units (2br 1 bath), stove, refrigerator, heating & central AC (no dishwasher, patio/balcony, etc.)
• on-site washer/dryer, off-street parking
• Currently renting for 740k/month plus utilities

Some questions I have:

1. Any insights on this part of Bakersfield?
2. What is a reasonable rate for a property management company for this area/property? Any recommendations?
3. Any advice on improvements to the apartments that make a big impact without overspending?
4. Any advice on the kinds of improvements I want to do including adding additional storage/functional decor?

I am looking forward to any advice and hope to find some help here!