What would you do with this Property???

So we locked up a property that offered us several options and I thought we would share the details and see what you would do. 

The property is a legal duplex, zoned multi family, with two electric meter and two gas meters.  It was built as a 1/1 on each side of the duplex. Unfortunately one of the kitchens was stripped and the duplex was built with a common hallway to the laundry room which is an odd configuration.  The exterior is great new paint, new windows and beautiful lot with flowers and fruit.

So we have two options:

First we could add the kitchen back and just clean up the inside of the house and we could have a simple and straight forward duplex.  The rent will be $500 a side.  But keep in mind we will need to pay for water and likely yard work (So budget an extra $100 in expenses). 

Or we could just convert one side of the duplex into 3 bedrooms by converting living room (adding closet) and converting kitchen by simply capping gas lines as the cabinets are already stolen/removed.  This will give us a 4/2 house and allow us to open the hallway by simply removing the interior doors and make the house flow better.  The rent will be $995 and the tenant will be responsible for water and the yard work thus saving about $100 a month.

In the end the option seems obvious.  We save about 3-4K in repairs as we don’t have to rebuild a kitchen.  We get the same amount of rent and we get better cash flow because we pass some expenses to the tenant. 

Long term meaning when we are ready to sell it we will likely recreate a complete duplex by adding the kitchen back as we will get more for a duplex than a house.  But this is years away and until then we will take the extra $100 in cash flow every month.

Sometimes it helps to think outside the box especially when faced with a missing kitchen!!!

Again we will save on the repair budget, we will get same rent, our expenses will be lower and our cash flow will be higher which means our Yield will be several points higher!!! 

I love this business.