Renovations that command the highest rents

[Casey Murray]

Hi All,

I was hoping to hear which renovations on multi-family properties help command the highest rents. As with all real estate, I understand each market is different but wanted to see if there's a universal concept that can be applied to get the most bang out of your buck (i.e. does spending $5K on bathroom repairs immediately command higher rents compared to spending $5K spend on HVAC repairs).

I'm in San Diego (where cash flow is a bit rough) and specifically focused on properties in the class B/C neighborhoods. I've researched the BP website but was unable to find anything on this topic using the keyword search. Thanks in advance for your input.

[Richard C.]

Understand that rents are not entirely within your control.  If you are in a B/C neighborhood, you will have B/C tenants and get B/C rents no matter how much you renovate.

I fully renovate everything.  But that is to reduce maintenance, force some equity growth and get houses rented faster.

People will not pay $1000 for an apartment in a neighborhood where similar apartments are available for $800 because it has a nicer bathroom.  They just won't.

Now, what might actually increase what a unit is worth?  Certainly more bedrooms as Bob suggests.  Off-street parking if it isn't already available.  Other than that?  I'd focus on renovating to reduce expenses (repairs and vacancy) rather than to increase rents.

Rents are based about 50% on location, 40% on the size of the unit, and 10% on everything else combined.