Hello!
I'm in process of rehabbing the top floor of a duplex (this unit is 4 BR / 2 BA about 1500 SF) with plan to refinance and keep as a long term buy/hold rental. We acquired tenants downstairs - they're on a M2M lease but we'll ask them to sign an annual lease in a week or so, and see if they stay or go. They're currently paying a little less than market, but their lease allowed all sorts of things that we would not re-up (chickens, trailers and cars in driveways etc).
For the upstairs, we are targeting, I think conservatively, $2k/month which is the high end of the market. There are not many 4BR units to use as comps and ours will be fully remodeled (new LVP flooring, stainless appliances, shaker cabinets, granite). Even with a conservatively estimated $70k renno we expect a 10% cap rate and 22% BTCF.
The unit is fully gutted now. Current boilers are30+ years old for the radiator heat. The estimate to install a new system for furnace and a/c for this unit was estimated at $12k. We are in NJ and the rentals seem to be mix of central AC and window units generally, but ours will be one of the nicest in a quickly appreciating market.
I'm floundering with my PRO and CON list and need to make a quick decision! We can fit it in the budget, the numbers still work well, but I'm don't know how impactful it'd be to potential renters and dont want to over improve or waste $12k! The benefits of a new system on reduced capex are nice, but installing central air where there was low-maintenance window units before seems like a wash. Any advice very much appreciated!!
