New commercial property owner. Some advice please help!
Hi guys, I recently acquired a commercial property here in Texas.  It's a small office building around 600 square feet.  It was built in 1960 and is pretty old.  My mother who has had experience in business advised me to not fix up the place because when a business rents it out, they will fix it on their own.  

Right now it looks like crap to me.  It's got ugly dry wall, ugly paint, rotten baseboards, and frankly I don't know if I should leave it like that.

I don't have much money but maybe I could save or take a loan out sometime in the future to invest in remodeling it. 

My question is, is it worth remodeling?  My mother said, "If they don't like what you did, they might tear everything down and do it their way anyway.  You'll be wasting your money."  

I've had a few potential tenants who looked at the place and estimated the price it would cost to remodel it and have backed away.  

Should I play the waiting game and be patient for the perfect tenant who will rent and remodel it themselves, or take it upon myself to invest in it for a future tenant? 

Thank you guys!

Here are some pictures of my "new" baby. (Built in 1960ish I believe)
http://imgur.com/a/Pxoym
[{"id": "cv6qneo", "text": "Do a compromise. Yes your mother is right in one sense that most tenants want to do their own thing, but if I was a tenant I'd expect a semi decent standard to begin with and not expect to pick up where you left off unless you offer extremely favorable terms or months free on a lease for example.", "replies": [], "depth": 1}, {"id": "cv6u1j0", "text": "Demo is cheap. So if there is like rotten old carpet or a water damaged ceiling, you may be better clearing those out, and providing more of a visual \"blank slate\" for prospective tenants.\n\nI would avoid doing any buildout though, since each business wants something different in terms of number of private offices, finishes, etc.\n\nKeep in mind there are different ways to pay for the buildout. The landlord can pay and increase the rent accordingly, the tenant can pay up front, the landlord can offset some or all of that with abatement (free rent) - this is what I'd probably recommend since it limits your up front costs while helping to keep tenants from being scared off by the amount of work needed. Good luck!", "replies": [], "depth": 1}, {"id": "cv6x668", "text": "Agreeing with others in here - there is a lot of value in restoring a space to a clean, ready-to-renovate state. \n\nSo yes, what I would consider doing is removing the baseboards, walls, even the ceilings. So all a prospective tenant would have to do is their own buildout.\n\nWhy don't you consider offering TIs? Build it into the lease or offer free rent. This is exactly what TIs are for, to attract tenants to a space that will require significant renovations.", "replies": [{"id": "cv7azu5", "text": "It's not very dirty but I will take some pictures for everyone here to get a visual of what I'm working with.  Heading to get a haircut now and will stop by the property after.  Thank you guys!  ", "replies": [], "depth": 2}], "depth": 1}, {"id": "cv71x2x", "text": "ok, unless your mom is in commercial leasing or real estate, dont give her advice much weight.  Get on google and find a commercial leasing rep.  Jones Lang has them, Irving Hughes is another.  Call them.  Have them meet you on site.  Listen to their advice.  Those guys don't want their time wasted but should be willing to meet up with you for 20 minutes just to establish a relationship.", "replies": [{"id": "cv7ayo4", "text": "I wouldn't want to waste their time.  My building and the surrounding area is very low income.  Checking the other rents for the properties around me range from 3-500 a month.  \n\nI will however take some advice from people around here and at least do the dry wall and baseboards and perhaps paint it a nice color.  \n\nShouldn't be more than a few hundred bucks.  ", "replies": [{"id": "cv7qkmm", "text": "Sweat and paint goes a long way.", "replies": [{"id": "cv7qlz7", "text": "Im always up for a fun job!  I've already bought the materials to skimcoat, prime, and paint.  Gonna tear off the baseboards first and unhook the outlets.  Do you think I should leave the electrical conduit piping on the outside?  Or cut the drywall and put it inside, and re-tape the drywall?  Would love your opinion", "replies": [{"id": "cv7rski", "text": "If you are already going to paint then I would move the conduit inside.  but i always end up doing/spending more than I should.  Realistically, at that rent price point, tenants are going to be super picky.", "replies": [{"id": "cv7rzwg", "text": "What do you by when you say at this rent price point?  Is 400-500 a month considered high?  Seems pretty cheap to me.  ", "replies": [{"id": "cv85g3q", "text": "no, very cheap.  i just mean someone paying $2-3.00 a square foot is going to have different expectations.  For a lower price point I would go with clean, safe, functional.  As far as rehabing and marketing i would focus primarily on curb appeal.  freshen up landscaping etc, get the weeds out of the parking lot.  seriously, huge difference...repaint street curbs. (fyi: they use a special paint). Nothing says 'I care' like a freshly painted red zone.", "replies": [{"id": "cv8eu5w", "text": "All wonderful suggestions!  I have already started working on tearing up the flooring and baseboards.  Any suggestion on the painted concrete wall on the inside?  How do I get the paint off?  It's got drip marks and it's hideous!  ", "replies": [{"id": "cv8min2", "text": "there is a concrete stripper that you can use if you can get it.  its really nasty stuff...illegal to purchase/use in california (where i am)  its available in other states though.  im planning on picking some up next time im in arizona.  google it up!  :)  i dont recall the name.\n", "replies": [], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "cvdbbm8", "text": "Exactly, paint, covers on the lights and tidy up things straggling from the walls. New baseboards. Don't bother re-doing floors but a nice stripping and rewax should work fine. Certainly don't build out rooms, you have no idea what the next tenant will want (all offices? all open?)", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "cv7j8rw", "text": "Gut the interior (cheap), replace the skirting/baseboards (cheap), repaint the walls (cheap), replace the ceiling if necessary (not quite so cheap) and leave it at that. Make sure the bogs are clean &amp; neat.\n\nYou want a blank canvas, a big empty space with four clean walls, and that's about it. The tenants will then be able to fit it out to suit their purposes.", "replies": [], "depth": 1}, {"id": "cv7lvqy", "text": "Hi guys I recently just posted some pictures of the property on the main OP.  Please give a review.  And thank you guys for your replies.  I've picked up some stuff at lowes to tear off the baseboards and skimcoat the drywalls.  That I will be starting on Monday morning.  ", "replies": [], "depth": 1}, {"id": "cv9eo4v", "text": "Make it simple but rent ready.  I think a lot of the posters here responded before pictures or before you said the price point was around 500 / month.  \n\nWhile it is generally true that commercial tenants do a lot of their own build out (which you might pay for anyhow), you are unlikely to see this on a space like yours.  \n\nYour most likely tenants are going to be people starting hobby businesses.  They usually have no idea what they are doing, have next to 0 capital, and renovating a space isn't something they want to do (nor would it make sense for them too economically.  Who is going to dump thousands into a space they are paying $500 a month for?).  They are usually excited too and want to move fast.  You very much are going to wind up more in the selling a house spectrum of re vs the typical commercial all business side.  You will want them to fall in love with YOUR space.  Having it crappy and trying to get them to fix it up isn't going to work well for you.  \n\nPersonally, looking at the pictures, I'd repaint all that stuff.  Rip those old counter supports off the wall.  I can't tell how bad the floor is, but either clean it or retile it.  \n\nWhat kind of businesses are you targetting?  Make sure you put signage up on it.  A stupid amount of leases on those small spaces come from locals who saw it and decided to open that business they have been thinking about for 30 years.\n\n", "replies": [{"id": "cv9fqlr", "text": "You hit the nail on the head.  I agree with everything you have said!  I have started work on it.  Do you have any other tips?  I'm afraid to rent it to people who move to fast as the last tenant was so excited to open her psychic business and she rented for 6 months and found it too hard to keep up with slow business.  \n\nMost of the people that call are exactly what you say, the hobbyist types or the i wanna try to start my own business types.  \n\nAre there any tips you can provide me with as to how to make people love it?  You're awesome thank you ", "replies": [{"id": "cv9iiph", "text": "what do the other spaces around this look like?  I'd try to make sure you find a good baseline of 'niceness'.  You don't want to be trump palace but you don't want to be the shittiest property everyone looks at either.  I'd really just focus on clean and finished looking.  \n\nPer other tips:  \n\nmake them personally sign the leases and make it minimum of 1 year IMO.  I'd not want to deal with anyone who can't do a year, they aren't really serious enough and will just kill your time.  I'd have the number for an SBA lender, and the city handy.  When you get those pie in the sky prospects you can quickly pass those on to them so they can figure out if they are grounded in reality before they kill too much of your time.  \n\nWhen you get one, I'd be cautious how you handle maintenance.  One spaces like that we like to set price limits.  For that, it would probably be $500.  Basically, roof/walls/and major systems are on us.  Anything else, if its not $500 to fix don't even call me, its on you.  \n\nI'd not do any business specific build out as part of ti for the reasons you said too.  If someone want to make that a restaurant or whatever, great! but I'd not want to pay for that rehab then have them out of business 9 months later and now I have a space with a more limited use.  \n\nIf some one wanted to say put awnings up outside or something that I thought was reusable and made the space better, that be something I'd be more inclined to do (or pay part of, give as ti if they go at least a few years etc).  \n\nMake sure you review zoning (though again, if folks ask you, i'd give them the cities number and tell them they need to figure that out on their own).  Pretty much the worst thing from your side is going to be dealing with people that look at it 10 times then tell you they found out you can't put a tattoo place in there or something similar.  You don't want to turn people away, but really just a ton of the people in that price bracket will waste a ton of your time when you can figure out 10 minutes into it that this isn't going to happen.  \n\nMake sure you know everything about what is going on around that property.  If someone comes in and wants to chat about bills diner down the road that they have been getting breakfast at for 30 years, you should at least be aware of it to make small talk.  \n\nPut that up on craigslist too.  I'm not a fan of it generally for commercial leasing but for that property I bet it works well.\n\nGood luck.  Come back and post after pics.  I agree to freshen it up from the outside if possible.  I hate those lights/fans too.  I'd not kill the bank but if you can put something cheap and more modern/clean looking up that probably be a vast improvement.  \n\nDon't be afraid to go talk to people too.  If bob the insurance agent is across the street, go stop in, introduce yourself and see if he has considered moving.  \n", "replies": [{"id": "cv9u5tn", "text": "Pure gold thank you!  I'm gonna copy and paste this to my iPhone notes.  Very good notes!  ", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]