Is there a place for good design in long-term rentals?

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Is there a place for good design in long-term rentals?

Allie Dattilio
Rental Property Investor · Hagerstown, MD · Member since 2018 · 26 posts · 3 votes
My husband and I are starting our RE investing journey, and getting a little overwhelmed by all of the options of how to jump in. (As I type that I feel like I can here Brandon and David’s voices yelling at us “just start!! Anywhere!”) but here we are... Our initial plan is to (conservatively) BRRRR. We have about $50k from our HELOC to begin — hoping to find a property where that can cover down payment and initial rehab costs. My dilemma is that I’m an artist (and yes, I actually make a full-time income doing that 😏 and have become relatively well-known locally) and I’m most excited by the rehab and design part of this project. I feel like good, unique design is one thing we have to set ourselves apart of the typical flippers/rehabbers in our area — if I see one more cookie-cutter rehabbed home I might scream! But can anyone convince me that putting a little extra effort in the design can be worth it in long-term rentals? And if so, what type of properties could this make the most sense? I’m hesistant to flip, because I feel like our current market is SO over saturated with (poorly) flipped homes. DOM seems to be constantly increasing. Considered short-term, but our suburb area doesnt quite have the market fot AirBnBs. And we are looking to invest in real estate for more of a long-term play. Okay, thoughts?
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  • Jason LeePro Member
    Real Estate Agent · New York, NY · Member since 2015 · 401 posts · 235 votes
    8y

    Yes, there is definitely a place for good design in long term rentals. You can make good design decisions at any price point, no matter if it's a high end flip or a low end BRRRR. It is true that you often get what you pay for but you can typically find nicely designed fixtures and finishes at almost any price point. Paint can also go a long way and it doesn't cost any more to do a sophisticated light grey wall paint, than it does the typical contractor beige or white. With flips you'll be ok going with decisions that are considered "on trend" but I'd steer away from things that might come off as too trendy in a long term rental. I can't help but think that things like barn doors for bathrooms, brass or tin kitchen hardware, etc, might fall out of favor. So yes, go ahead and put extra effort in the design but keep in mind the ROI. This is an investment after all.

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  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    8y

    @Allie Dattilio

    The people who make money in this business are the ones that never forget that this is a business. There's not much room for good design in long-term rentals when the design comes at the expense of the durability/hardness of the unit, or significantly increases the rehab cost of the unit. But when design elements don't cost the earth and can stand up to the rigors of renting, of course there's a place for design, a very welcome one, because it will set apart your units from others that are renting for a similar price.

    Keep your eye on the ball. If you are ever in a position where you come into a property after its been rented for three or four years and you feel a sense of personal loss because something's been beaten up, or knocked around, or treated with total disregard, you're way too personally invested in the rental's decoration and not interested enough in how to make money with your rental.

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  • Allie Dattilio
    OP
    Rental Property Investor · Hagerstown, MD · Member since 2018 · 26 posts · 3 votes
    8y
    @Jim K. Thanks — these are good points, and honestly can totally see myself getting too personally invested. But it will at least help to be aware and cautious of it. We’re still looking for our first deal, but focusing in on b-class townhomes — built within the last 20 years, builder grade finishes. Where we can come in with a little paint, tile and new hardware to set ourselves apart.
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  • Allie Dattilio
    OP
    Rental Property Investor · Hagerstown, MD · Member since 2018 · 26 posts · 3 votes
    8y
    @Jason Lee Thank you! My taste tends to be more classic, but I do think it’ll help to set us apart from builder grade finishes.
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