To Rehab or not to Rehab

[Anja Schepp]

Hello All! 

I have a condominium (1b/1ba) in Austin, Texas in a college housing heavy area. It's currently featuring old laminate counters, worn out sheet vinyl flooring in the kitchen, a suspicious yellowed bathroom vanity counter and office style overhead light in the kitchen that really draw the eye and detract from the fact its a really nice space otherwise. 

I am having trouble deciding if it's worth the renovation. These are pretty basic fixes in my opinion, but there seem to be a lot of really nice units in the area, and I'm not sure if that market is oversaturated. I don't want to dump money into renovation if it won't get the premium rate, and I should actually just stay in a more budget, unrenovated niche.

Currently it just about breaks even with the hard costs and saving for more major repairs someday. This is pretty much what I expected in a hot market like ATX where I was buying off the MLS with little experience. It rents at the low end of the spectrum with very little to no vacancy, and 1b/1ba's in the area can range from $1,000/month (grandfathered in leases in similar units) to $1,800+ for summertime leases on renovated, professionally marketed units. This is my first unit and I am trying to scale as quickly as I can so every $50/month helps, but spending too much cash to renovate elements that won't return will really set me back as well.

Any and all advice is appreciated, and thank you in advance! 

[Jordan Moorhead]

@Anja Schepp sounds like you could make a big difference with a few grand. That would make the place worth more, rent for more and rent faster. In my experience it's usually worth it but I would figure out how much it would cost and what kind of rent premium you can expect for that investment. Can you do monthly rentals?