116 Doon Road
Kitchener, Ontario
When We Started
This was a different property, a 6-unit apartment building. The property is in great shape, the units are just outdated and VERY under market rents.
Why This Property?
This 6-plex we got for a good price and in a great location of Kitchener. We got a good deal because there was a problem tenant who had a mattress fire in her apartment. Not only did the landlord have to renovate the unit, but she was entitled for the problem tenant to come back and pay the same rent. We took this as an opportunity to negotiate a deal with the problem tenant, in order to do the renovations to our standard (very high end) and rent the unit out for top dollar with all the amenities to a new tenant.
What We Did
We are in the process of finishing the 1-bedroom unit. The problem tenant is no longer coming back, and we will now get a LOT more in rent. The renovation is substantial where we added a ductless AC, dishwasher to the kitchen, in-suite laundry, custom kitchen with quartz countertops, etc. There were many delays because of the tenant but just the actual unit renovation was about 2-3 months.
How We Increased Value
We added all the extra amenities to get top rent, the rent will increase from $750/month originally to about $1600/month with the renovated unit to new tenants.
The End Result
The end result is almost $10,000 extra per year in rent, a brand-new tenant and with a 4.5% cap rate over $200,000 of added value to the building, within the first 6 months of owning the property.
- 6-plex Purchase Price = $1,420,000
- Renovation Budget of Unit = $50,000
- Extra Rent in 1st Year = $10,200
- Value Added to Building @ 4.5% Cap Rate = $225,000
Gallery
