By Paul Branton, Director of Investor Services
Happy New Year! As we look forward with anticipation for what 2021 holds in store, I want to jump back to a story from last month where we helped two clients acquire duplex properties. For me personally, this was a really uplifting and positive way to bring 2020 to a close. While the units are basically the same with 3 beds, 2 bathrooms and 1 car garage, the circumstances surrounding the acquisitions were a bit different. This is the tale of two duplexes…
Duplex #1 (Owner Occupied Side Selling / Renter Occupied Side Staying)
This property was purchased by a current client who knew to give us a call before signing a contract. He got in touch with me and asked me to take a look at the property, give a rental rate estimate and provide our opinion on the location and condition. This was done quickly by way of a few emails and phone calls.
We confirmed that the property appeared to need some work, was in a good location and should land in the $1,195-$1,295 rental range. This client proceeded to make the offer and put the property under contract. During closing on the property, the client made sure to get us keys and we immediately listed the property for rent that same day.
We had an approved application the very next day, and we were able to get a lease in place for occupancy two weeks later at a rate of $1,295/month. All told, this client paid $310,000 for the duplex, spent roughly $1,500 on a couple of appliances and had less than 3 weeks of vacancy from closing to renter occupied.
Duplex #1 at Closing
Duplex #2 (Investor Selling / Both Units Renter Occupied and “Staying”)
This property was acquired by an individual who was not yet a client at the time of purchase. This investor put the property under contract and then called us to discuss leasing, management services and projected rental rates.
When the property was put under contract both sides were occupied… one tenant had just signed a new one year lease and the other was on a month-to-month (MTM) agreement. Shortly after closing, the MTM tenant decided to move out, which put the client in the position of completing a sizable make-ready renovation. This client paid $301,000 for the duplex and has spent roughly $22,000 on an 85% renovation for the make-ready and repairs on the other unit. The make-ready required two weeks of time and we are hoping to lease the property quickly so it only has a 4-6 week vacancy. We are estimating it will also rent for $1,295/month.
Duplex #2 At Closing
Duplex #2 After Renovation
While the overall experiences, timelines and expenses were slightly different, the end results were actually quite similar. And both clients brought quality rentals to the housing market… with a little help from the HRS team!
Are you interested in owning rental property or growing your existing rental portfolio?
If so, please give us a call… we are ready to help make it a fun and rewarding experience!