Author Topic: Repair Stand-alone Workshop or Tear Down?  (Read 2055 times)

SwordGuy

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Repair Stand-alone Workshop or Tear Down?
« on: January 15, 2015, 08:24:55 PM »
We're in the process of purchasing an inexpensive rental. 

We'll be paying $38,000 for it.  Repairs will cost around $10,000.

We expect to rent it out for about $800.  It has a number of nice features in it that you won't usually find in rental homes at that price point.  We would be happy to get more for it (and might), but we're not counting on that.

There is a workshop in the back yard.  Half the repair cost, i.e., around $5000, will be needed to repair it or bring it up to code.
That's with us doing most of the work, and there's a goodly amount of work to do. 

There's a lean-to roof attached to it that's rotted.  Simple construction but it has to be fixed.  The lean-to has a fence around it that needs some minor repair work.

The masonite boards on the side of the workshop have a lot of water damage and have to be torn off and replaced.

The circuit box (it has its own) is clearly not up to code.   There are unsecured electrical wires snaking across the floor.f

The sheet rock on the walls is mostly ok, but the ceiling sheet rock looks like a wall-eyed drunken Picasso wannabee put it up.

Roof and floor are ok.

Now, I'm the kind of guy who would LOVE a workshop.  But most people don't seem to want one.  We might rebrand it as a kid's playhouse.

So, do you think we would get enough additional rent out of our $5000 repair bill to make it worth it?  Or is it just more stuff to maintain for the same rent?


money_bunny

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Re: Repair Stand-alone Workshop or Tear Down?
« Reply #1 on: January 16, 2015, 06:22:19 AM »
What would you get extra for the workshop? Is it big enough that a contractor may consider renting from you to put his tools/equipment back there?

SwordGuy

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Re: Repair Stand-alone Workshop or Tear Down?
« Reply #2 on: January 16, 2015, 11:44:41 AM »
No, it's simply not feasible to rent it out to a third party.  Good idea though!

I really don't know that I could get a higher rent, or how much higher a rent I could get.

I suppose if I found the right tenant they would tend to stay longer. but I'm not sure that's going to be worth an extra $5000 now.

I'm rather hoping folks will tell me how much extra I might expect to get for the rent...

Another Reader

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Re: Repair Stand-alone Workshop or Tear Down?
« Reply #3 on: January 16, 2015, 01:15:08 PM »
I'm not in your market, so I can't answer the question of how much more rent you will get.  It is likely the property will appeal to a broader range of tenants with the extra building.  It's also likely you will recover at least some of the costs if not all on a resale.  If storage buildings and workshops are popular in that part of town, you may get back more than you put in, especially with you doing the work.

bzzzt

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Re: Repair Stand-alone Workshop or Tear Down?
« Reply #4 on: January 17, 2015, 05:35:08 PM »
I don't think you'll necessarily be able to get more for the property, but it'll make it more attractive to certain tenants. Hopefully, more of an independent contractor type person and not a "Hey, there's a spot for my meth lab" type of person.

Weedy Acres

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Re: Repair Stand-alone Workshop or Tear Down?
« Reply #5 on: January 17, 2015, 07:09:33 PM »
Is there already a garage and/or basement?  If so, then I'd tear the thing down.  If the house already has a place to store stuff, then an additional workshop would maybe get you $25 more a month, and only from the right renter.  (And how many renters do you know with loads of tools?)  If it costs you $5000 to get that $25/mo, that's a 16 year payback.  Not worth it.

A workshop in this case goes in the category of "will make it more appealing to a few people but would not be valued by most."

SwordGuy

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Re: Repair Stand-alone Workshop or Tear Down?
« Reply #6 on: January 18, 2015, 08:01:17 PM »
No, there's no garage or basement.

I guess it might be more valuable to people who would otherwise spend $60 a month renting a storage unit...

I suspect we'll just tear it down.  (But tearing down a workshop is a lot like burning books to me...)

Thanks everyone.