While luxury living is all the rage in the brand new apartments being built in Minneapolis and surrounding suburbs, following suit with your Minneapolis duplex may not result in riches.
One of the most common mistakes many new landlords make is spending money on improvements that will not generate more rent.
When looking to make improvements on your investment property, a good rule of thumb is to ask yourself if you can increase rent as a result of it, and if so, how long would it take for that increase to cover the cost of the improvement?
For example, let’s say your duplex has worn out tub surrounds on the walls above the tub. And, frankly, they look terrible. The cost of replacing them with subway tile is $1000. You believe you can get an additional $50 a month as a result of the improvement. Well, $1000 divided by $50 means the tile will have paid for itself in 20 months.
While granite is the rage is higher-end properties, it may not be expected in a more affordable rental. It’s a nice finish, to be certain, but if your investment property is in a neighborhood that doesn’t command high dollar rents, ask yourself if a new, less expensive countertop could you have achieved the look you wanted with a more reasonably-priced option?
The vacancy rate in the Twin Cities is below three percent. Tenants are having a difficult time finding places to live. You should provide a clean, safe, well-maintained unit; but it may not need to look like the end of an episode of “Fixer Upper” either.