Experiences? How much to renovate in a changing neighborhood?

[Jon S.]

Has anyone ever been in this situation? I'm renovating a triplex I just acquired, in a neighborhood which is currently going through transition from low income to high income.  The problem is it has been a low income neighborhood for a long time, and the transition has started but it will take a few years for the neighborhood to look nicer. I'm not sure how nicely to renovate. I have to renovate completely either way, as the place was a complete gut. I have to renovate the kitchens, but I have options, like to salvage the existing cabinets, which are older. The kitchens have to be renovated either way. Do I spend on new cabinets? Not very far away, about 6 blocks away, a traditionally trendy high income neighborhood delineated by a main street, has become overpriced, so many buyers and investors have decided to start buying in this neighborhood, which is equally close to everything.  While high priced homes have already started being built and purchased in the neighborhood, at the same time, there are several drunks who walk past my triplex several times a day, and usually ask anyone they can for money. While I have sort of gotten used to it, I doubt prospective higher income tenants are going to like this aspect of the neighborhood, drunks walking up to them and asking for money for a meal. I want to attract professionals who wants to live near downtown, and this place is literally under 5 minutes to anywhere downtown, and also about 10-15 minutes to the university. There is also a medical school moving to downtown. I see a lot of opportunity to rent to young professional renters. These are all 2/1 units, between 650-875 SF each. I can put in privacy fence to make it nicer and also to give some relief from the random inquiring local drunk brigade.  However, I'm still not sure if that is enough, and I'm worried if I renovate with nicer materials with that professional as my target market, which is my current plan, that I might find the neighborhood in transition will keep higher end tenants from renting. What can I do to make this situation better? And is it still smarter to use the nicer materials and go ahead and make the kitchens a bit nicer with new cabinets rather than salvaging the existing cabinets? Any suggestions appreciated.