Many properties that are up for sale already have undergone renovations. You must decide if there’s potential for more. A typical older apartment property will have one of the following three characteristics:
Fully Renovated: It is important to evaluate whether it is worthwhile revisiting the units or adding better/better upgrades. It’s amazing how many upsides there are even when a property is advertised as “renovated” or “turnkey.”
Partially renovated properties are the most difficult to plan for. Although it is easy to understand the overall condition of the property at a high level, the logistics of planning for a renovation that will have different costs and different rehab plans can be overwhelming.
Sometimes, it is possible to see multifamily properties that have been mismanaged and there are no records. Managers may tell you that they have done some rehabs but not all at once and don’t have the records. If this is true, you’ll need to take photos or detailed notes when touring. This can be annoying but it is likely to be a great opportunity.
You should never assume that the renovated property will fetch more rents than properties in the same sub-market. You must always be able to back up your claim. You are basically guessing if you can’t.