A quick success story

[Tim VandenToorn]

Here is a quick success story about one of our investors in Grand Rapids Michigan. We are a property management company helping investors find, manage, and sell real estate investments.  We offer a full-service brokerage but also a full-service handyman and remodeling services. 

Our client purchased a property in 2016 for $65,000.  When we took over management, the property was occupied, and rent was $700.00.  When the tenant moved out in 2023 the tenant was paying $1215.00.  A nice gradual increase over the last 7 years that didn't force a turnover. 

When the tenant moved out, the owner asked us a critical question:  What could I sell the property for, and what could I rent the property for? 

We provided him with 3 options.

• 1: Clean up and sell as is for 5k  -We could get a buyer for $149,000
• 2: Lipstick for 15k- I think we could do the bare minimum like the Rent Ready quote you received and sell for $175,000
• 3: Full update 35k- like what I suggested in the video sale price $225,000 I would have to get a contractor over there and I would expect the project to take around 3-4 months.

With some encouragement, the owner chose a mix between 2 and 3 and invested $30,000 into remodeling the kitchen, flooring, walls, doors, etc.  It hadn't been turned over in almost 10 years, so there were a lot of little things. 

Once the project was completed, the owner asked the same question: What could I sell it for now, and what could I rent it for?  The answer was we could increase the rent to $1800-$1900, or we could sell for $230,000.00.

The investor said in order for him to get $1900 in rent in his market, he would have to buy a house between $350,000 and $400,000, so he decided to keep the property.  

After marketing the property at $1895.00, we obtained a holding deposit within two days.  The new tenant will be paying 1895.00 per month! 

I have been asking our investors at every turnover if you could invest 10k into your property and increase the rent by $100.00 monthly. Would you consider that a good investment?  99% of the time, they agree that would be a good return on the $10,000 investment.  

The return is actually more than 12%; the value of that improvement will also #1 reduce vacancy (make your house the best option on the market) #2 increase the property value (he added value to his house by updating it) and #3 lower monthly maintenance costs (we got rid of the old junk which will reduce maintenance cost).  This investor upgraded his property for 30,000 and increased the rent by $500 a month!!!!  WIN WIN WIN. 

[Logan Laperriere]

Well done! That is an awesome success story!