Help me analyze this rehab please!!

[Joshua Hollandsworth]

I'll keep it short. I see a possible opportunity to build some equity, but this is my first rehab. This property is a rental, so there's no pressure. I bought my property for 55k. 1100 square feet. 3 bd 1 ba. Built in 1944. The property next to mine was just appraised for $89k. 3 bd. 1 ba. 1100 square feet. Built in 1944. However, there are some big differences in our properties. They have Central A/C. They have a new driveway, new garage, newer windows, new appliances, newer bathroom, newer kitchen. I have 60 amp they have 100 I want to say. I'm pretty sure they have click lock flooring I'm the living room and everything else is carpet. They spent $40k on renovations I'm assuming the driveway and garage played a huge role here. Im not touching the driveway or the garage. I just want some advice on how to get the biggest bang for my buck. I'm planning to rehab, but I would like to capture some equity. Any advice is highly appreciated. Thanks.

[Keith Linne]

@Joshua Hollandsworth If you don’t have your real estate license, find an agent who is willing to provide you with a market analysis of comparable properties - both in the same shape as your property currently, and in the same shape as the updated property nearby (but without the perks your property lacks). Spend a ton of time examining differences and learning what impacts value in your market. I live in Minnesota, and garages play a huge factor in property values (many buyers completely rule out homes without them). That being said, price point also plays a huge role (cheaper homes don’t have as high of expectations). Also keep in mind non-rehab related costs such as holding costs (utilities, taxes, mortgage payments, etc) and selling costs (commissions - typically around 6% total, staging - if applicable, etc). Unless you are able to command a similar re-sale price point without the nice garage/driveway, and while also completing the rehab for a significantly cheaper total cost, you will likely find the upside a bit thin. When i was rehabbing properties full time (2011-2014), I also always aimed to set my re-sale price 5% shy of market price. This led to fast sales on the back end, and allowed for slight market downturn, just in case (I prefer to be conservative). Good luck!