How Much Do Upgrades Matter In Your Minneapolis Duplex?

The other day I showed a duplex listing that my buyer had some interest in. When I called the listing agent for further information, she extolled the property’s virtues like it’s floorplan and superior kitchen in defense of its above-market list price.

Here’s the thing.

My buyer was an owner-occupant. So yes, nice kitchens and livable floorplans are important.  However, his decision to buy a duplex instead of a house is a financial one. In other words, he is trying to live less expensively than if he were paying 100 percent of the mortgage on a single-family home.

It isn’t a house. It’s a duplex. And the only way those features impact the property’s value is if they help the owner get more in rent than someone else’s duplex down the street. More rent makes the property more affordable for the buyer.

And of course, were he strictly interested in buying a multifamily property as in investment, the property would have to at minimum, break even and more likely, cash flow.

So if you’re a duplex owner wondering what improvements to make before you sell, think about the rent. Will replacing a tattered front door and improving curb get you more rent? Maybe not, but it may help you stay rented. Will an updated kitchen? Maybe. But how much more per month? $25, $50, $100? And whatever that number is, how many months will it take to pay for the kitchen? Will expending money for composite decking material vs wood? Probably not, but it will save on maintenance.

As always, the biggest and least expensive improvement that will most impact its value is raising the rent. It doesn’t need to be at the top of the market, but it should be within striking distance.

And while nowhere near as inexpensive, adding bedrooms always increases the rent you can charge.

Remember, every additional dollar in rent results in about and additional $10 in value when it comes time to sell. That’s a pretty good return on investment.