If you spend $21,000 in Remodel Cost your initial year of ownership, then it only costs you $2,100 per year for 10 years to remodel your unit.
Now, if you increase your Gross Rental Income by $5000 per year over the next 10 years due to the remodel because you can now charge more for a daily rate, and you should increase your occupancy as more renters will book your unit because it’s updated, then you’d make $50,000 in additional Gross Rental Income (GRI).
$50,000 in GRI subtracted by $21,000 for your remodel leaves you with $29,000 in projected profit you made off remodeling your unit at the end of 10 years.
You’re already invested in it, it should be building equity and appreciation, plus earning you depreciation, so go ahead and spend $21,000 to make $29,000 so that it does even better.
Now, that’s not to say that the additional $5,000 in Gross Rental Income annually is your lid. You could make $7,000+ each year.
$7,000 in Gross Rental Income over 10 years is $70,000 in additional Gross Rental Income.
$70,000 in GRI subtracted by $21,000 for remodel cost leaves you with $49,000 in additional projected profit.
Additionally, your property is better positioned should you need to sell it quickly before the 10-year horizon.
In my opinion, it’s clear to see that a little upfront investment in remodeling your Oceanfront Condo positions you for better resaleability, can generate a projected profit, helps increase your occupancy, and can generate additional Gross Rental Income (GRI).
Call today to discuss your next Oceanfront Condo purchase in the Myrtle Beach Real Estate Market: 843-360-1737
Disclaimer: All information given is meant to be educational. I am only passing on historical information shared with me by owners, rental companies, and various publications. I am not guaranteeing these numbers, nor can I guarantee future rentals or appreciation. This information is not intended to replace your own research, or to provide legal, investment, or financial advice. Please consult an attorney for legal advice.