@Daniel Wang I am a big fan of property management for two reasons:
1. You as the owner can keep a somewhat removed position with the tenants. Basically the option to have a bad cop - good cop situation. The property manager will work and keep costs reasonable, make sure that the tenants pay for what they damage, etc. but if there is a need for the owner to be asked and approve something you can be the generous one. This also applies when you want to increase the rent and your PM has to sell that to the tenants.
2. The PM will help you keep your investment passive. Based on what you wrote it appears that you intend to keep growing a portfolio. That will probably include properties so far away from your location that you could not manage them anyway. Having a PM and getting used to leading the PM and communicating in the role of an owner is educational. You should also consider creating an LLC so that you are not only the owner of the property but also a business owner. People who come to me to get mentoring and want to build a passive income portfolio that leads them towards their personal Time Freedom Point learn how to do these things and ultimately really have a fully passive (both money and activities) organization.
As for the renovation question. I know that a duplex is considered a residential property that is evaluated by comparison to other similar properties in the vicinity. Still, I always recommend looking at the rental property as if it were an apartment complex to determine if spending money is smart. Any complex that has more than 5 units is considered "commercial residential". The valuation is calculated by the rent roll, meaning how much rent per year are you getting, and then a multiplier is applied to calculate the overall value. In that scenario, if you had a place with 25 units and you get $12000/year in rent that would be, just hypothetical $12000 x 25 x = $300K. Now you subtract your expenses, typically about 45% ($135000), and you are left with $265K. To get the value you divide by the cap rate. I believe 8% is reasonable. That means your apartment complex would be valued at $3.31 million. The main point here is the rental income. Obviously, if you could ask for more rent and your rent role would increase by 10% the value of the complex would also increase by about that amount.
If you believe a renovation of your duplex property would allow you to increase your rental income substantially, you would do it. The problem is that the renovation costs money that you probably should finance. Let's say you have a property that cost you $300K to buy and pays $1250 in rent for each side of the duplex + $2500/month total. Your expenses with vacancy, property management, CAPEX, and maintenance considered would be probably around $2000 and cash flow of about $450/month.
Let's say you spend $50K to renovate the property and you refi after that renovation, the bank accepts the total $50K as a true increase in value and gives you 100% of the money. You would have to increase the rent by $250/month just to maintain your cash flow and a bunch more to increase your cash flow. The question is if that is realistic? If you feel you are making good rent that is close to market rate, adding more money for renovation will only reduce your cash flow.
As an alternative, if you could afford to do the renovation and pay for it out of pocket or at least have most of it, you could get yourself a second property for about $150K fully managed that would probably pay you $300/month in cash flow and your overall asset value would increase substantially more.
I think there are very few cases where a duplex that rents reasonably close to the market rate would be worth renovating a lot to increase cash flow. The one scenario where renovating might make sense is to substantially increase sales value, but then you are not developing a passive income portfolio and focus mainly on the appreciation.
Check what the purpose of the investment was and then decide if renovating or investing in more properties is the better approach to reach your goal.
If you like to discuss this, send me a DM and we can set up a chat.
