"Slow" BRRRR aka Over-Renovating a Buy-and-Hold Property Delimma

[Matthew Williamson]

If my goal is to hold a property for a long period of time (potentially passing to heirs), I would want to do the best possible renovation I could to help avoid long-term maintenance issues. My thinking is to take care of all the structural and MEP/infrastructure work all at one time, avoiding costly future repairs and potential missed rent opportunities. And I don't just mean repairing what's obviously broken. For example, if I found mold in one part of the house, I would want to destructively search other parts of the house. If I saw an undersized header in one load-bearing wall, I would want to open up and check all load-bearing walls, etc.

This type of renovation would add a lot of time, and have high associated carrying costs. I probably wouldn't be competitive when bidding for these properties. It would be way overbuilt for the neighborhood if the goal was simply to re-sell the property at a later time. Taking this to the extreme, I would just tear down the existing building and start from scratch, being sure to build it to my (read: highest) standards. 

I definitely see the downsides to this approach, but I can't convince myself to just put "lipstick on a pig" and do it a cheaper way. Has anyone else faced this dilemma? Best practice construction sites like FineHomebuilding and GreenBuildingAdvisor have been a curse for my real estate investing efforts ;)

- Matthew in Texas

[David M.]

@Matthew Williamson

I think you need to adjust your outlook...  If you really are focused on long term hold, even for heirs, then is "over renovating" bad?  I have no idea what sort of timeline you are looking, but would say 60 years be good?  Something for your lifetime and a small portion for your heirs?  Would it not be worth the investment upfront (although many items in a house will need replacing..) over such a long period?

Also, isn't this where they talk about a property having "good bones?"  Nothing wrong with finding the "right" deal that requires a full gut...  But, sometimes you need to work with whatever you find...

Make any sense?