So you’ve done the market analysis, determined your property is in need of renovations, you’re OK with the payback period – what’s next? The calculations you used to get here should have had you obtaining bids from contractors so you’re all ready to go, but which one to use and when to do it?
On selection of the contractor, I cant stress enough how important it is to truly vet them and not always just go with the least expensive.
Especially when trying to work around tenants, timing is one of, if not the most, important elements of the selection. Be sure to thoroughly explore the contractor’s past work and talk to past clients. Remember, quality is important, but construction schedule and on time delivery are right up there. There is nothing worse then a contractor who continually delays.
So now what?
So we have selected a contractor and we are going to renovate a bathroom, but when do we do it? Most leases in Boston run on the 9.1-8.31 cycle with no vacancy It must be impossible to renovate, right
Keep in mind your investment property is a cash machine, we can’t afford to have it vacant and miss the cycle. So what do we do? The first step is to get your current tenant excited about the new bathroom (or whatever) they are going to have. Have the conversation with them and explain your plan and how nice its going to be and how the rent will stay the same for the rest of their lease.
Typically this works well and they will allow the construction. Keep in mind your contractor should be able to do a kitchen or bath in a week, flooring is a little tougher. If your tenant is not ok with you just doing the work, try offering a discounted rent for the month.
If that doesn’t work, try finding a time the tenants are going to be away for a week (like Christmas or Thanksgiving.) One of these strategies typically works and is significantly better than creating vacancy in your apartment.
Here’s a bonus tip:
If you are going to do any renovations, do them before the apartment begins to get shown for the next renal cycle. I’ve tried to rent apartments with promised renovations and you always end up leaving money on the table. Renters will always pay more for a product they can see, so get it done and then put the apartment out for rent!
There you have it! If you need assistance in finding a contractor of further explanation on these strategies for increasing rent and improving your investment property please contact me.
Till next time, keep your cash machine cranking!