We bought a 4BR 2BA house, built in the 1960s in a HCOL area of the US, many years ago. After residing in it for a few years, we converted it to a rental when my job took us overseas.
Meanwhile, the house has nearly tripled in value. We've refinanced and are a few years into a 30-year fixed at a very low rate given US mortgage financing history. Because rents in the area have risen substantially, the rent comes to not quite double our PI (we don't escrow). It would frankly cost us too much to move back into this house, if we ever returned to the area.
We've replaced most of the important house utilities/appliances in the last few years, but our current property manager warns us that he's having trouble finding parts for our bathroom fixtures.
He worries about an irreparable leak that would require emergency work that would leave us sub-standard results. He recommends having not just the bathrooms redone, but also having our tenants quit so that we can perform a full renovation. The kitchen badly needs an upgrade, though the current tenants - mostly the same ones who have lived there from the beginning (it's a group house) - seem cool with it. If we did a full renovation, we'd probably insert skylights in the kitchen and upper bathroom (both are North-facing) and also replace the roof as well to ensure a good seal and because the shingle roof is approaching end-of-life. We'd probably also repaint inside, remove the wall-to-wall carpet, refinish the hardwood floors, and replace all the doors, banisters, &c. Separately, the concrete on the back terrace, the stoops, and the driveway all need replacing, especially to ensure that rainwater flows away from the house.
Since we're still overseas and cannot afford the time and money to oversee a full renovation on-site, we're thinking of doing just one bathroom at a time and leaving the rest for later. We've approached the tenants of having them stay during the bathroom work (they don't know about the possibility of a full makeover) in return for a rent abatement (amount TBD).
If the tenants ever departed of their own accord, we'd definitely need to proceed to the full makeover to get the kitchen et al. up to re-rental condition. If we did the full makeover now, we'd control the timing, but we'd have to finance it, and the ROI isn't especially promising.
Meanwhile, we have one child in college and another heading there in a few short years, creating a cash crunch.
Finally, our current property manager will retire next June. I know he really wants to supervise a full makeover because he's a former builder and he enjoys it, and we believe he could provide good quality control; we, of course, reserve the decision on how to proceed to ourselves. He has one general (not fully fleshed-out) bid in hand and two others getting worked up.
What do you folks see and recommend in our situation? What would you do?