In unit washer/dryer vs. laundry room in C class area

[Jay Garrison]

I am wrestling with putting in plumbing, vents and stack units for a two flat with garden unit. I estimate I can get an extra $150 to $200 per month for each unit, but I also want to add central air and I am thinking about the cost effectiveness of what would run about $22K altogether - 14K for the plumbing, venting, new stack units and the rest for either mini splits or central air. 

Currently I have a laundry room in the basement, but it could use some upgrades and tenants have to go outside (very briefly) to get to the door down to the basement. The area is improving quickly as Pilsen becomes more expensive, and I am also wondering if it will ever be cheaper to do it. Had I done this 3 years ago, the cost would have been much cheaper for sure.

[Charles Carillo]

@Jay Garrison

When doing repairs/upgrades to rental properties; we use a 36/48 month payback. For example; if we invest $1,200 into upgrading a unit (adding a washer/dryer for example). Are we able to increase rent by at least $25? If so, that is like a 25% ROI.

For your situation; the plumbing costs $14k, and it will bring in $150 per month. That payback is nearly 8 years. If the area is quickly improving, maybe you will perform this, in anticipation of rent increases of $300+; but, that is all speculation. What is your estimated rent increase for investing the $22k? I personally would want to see an increase of $450-$500 per month which is probably not viable in a class-c (currently) area.

One last question, since it is a class-C area, would these improvements actually create resale value? Will another investor pay more for these improvements? Some improvements that I would pay more for as a C-class investor might be; separate electricity meters (including an owner meter), separate water meters, or newer mechanicals. C-class investors/renters are less concerned with central AC and are used to not having a washer/dryer in the units.