Attic conversion, yes or not?

[Dale Crawford]

We bought an older duplex as a buy & hold. The attic has space has a stairway & room for about a 12x12 bedroom. I would guess I could get an extra $100/month rent by converting it. My contractor originally told me about $2000 for the work. Now we need to add a new motel style heating & air unit because of the way the HVAC is so now we're looking at $5000. At what point is the cost of the conversion prohibitive? Has anyone used any other options for heat/cooling?

[Jeffrey H.]

I assume you have something like a 50% expense ratio every year - so basically this improvement will net you $600 additional dollars (1200 times 50%), which translates into a 12% return on investment @ $5,000.

Everyone has their own goals on what is an acceptable return.  I would just be very sure you can get at least $100 more per month as you said, otherwise the economics change a ton.

You might want to get a couple quotes on installing a split HVAC system too - these are pretty cheap and 3K extra seems high.