We're about to put a house on the market. It has been a rental for three years, so it needs paint and new flooring. Most of the house is carpet, with some laminate and tile. I think the tile is still in OK shape, while the carpet and laminate looks awful.
The house is a 1960 3/2/2 in a nice middle-income neighborhood. I think it will sell for $150-$160K. The market is insane right now and prices are rising by the day.
The house was totally remodeled in 2006 by a flipper. The finishes are not cheap but not luxurious. We added really nice double-paned windows and expanded the kitchen. Other sales in the neighborhood that have been remodeled generally have granite, stainless steel appliances, and laminate flooring.
We have Formica counters, which I'm really not willing to upgrade because the counters were new in 2006-2010 and there is a TON of counter space for a small house, which would make replacing it prohibitively expensive. The appliances are white and 8 years old. Again, not really willing to replace perfectly good appliances with stainless steel unless I have to.
My main question is about the floors. I can put down vinyl plank flooring myself (peel-and-stick or glue-down) for less than $1,500. OR I can have laminate installed for $3,000-$4,000, or engineered hardwood for about $5,000.
Which is the best return on investment? I think the vinyl plank would look good enough to get it sold, but is it a huge turnoff for buyers? (I personally think it's a great product, and am considering putting it in my own house and definitely my rentals.) Is the draw of having real (engineered) wood enough to recoup $5,000?
@Jessica G. ..I would invest in the higher end material to sell fast...On the retail side most buyers want move in ready without major upgrades..
Check your competition, do what they do or better.
Your property sounds like it fits into that range for first time homebuyers. My experience with this buyer category is that they have unrealistic expectations. I agree with @Bryan H. that you need to match or exceed whatever the competition is doing. New buyers want perfection. If you give them that and price it right, the house won't sit on the market forever.
Thanks for the input everyone! I am not too worried about it sitting on the market. Homes are going under contract in less than a week around here in DFW -- sometimes the same day -- if they are priced correctly, so I just don't want to put in more money than I can recoup when we sell.
Check out what other homes in the neighborhood have - that would be a good starting point. Keep an eye on how the price changes (of sold comps) and decide whether flooring upgrades will be worth your time and money
I always picture myself as a buyer in that price range. What would they expect to see for the finish of the home. If it is high end, they think they are getting a great deal at the price (if you are competitively priced) - same finish they don't think about it too much - too much on the low end, they notice and think "What else is inferior about this home?"
My $0.02 - good luck!
@Jessica G. I am about to start rehabbing a similar home in Richardson as well. I noticed that, at least in the neighborhood my house is in, that the highest comps were completely renovated with higher-end finishes - i.e. granite, hardwood, stainless steel, etc.
You'll have to make the call based on your comps, but if you want top dollar you'll have to match what the competition is doing. If you're willing to take a little less, then you have more choices. Like you said, the market is hot right now. It may make sense to target a lower price point and find a young couple that wants to do a few improvements of their own. Do the math and see which one has more profit potential.
I wanted to do laminate or tile instead of carpeting in my last rehab. Tile is big here in living rooms. My agents talked me out of it. Great location, low inventory, non-distressed sales are mostly going over asking. I had the crew do tile in the open kitchen and define a dining area with tile and then replaced the carpeting in all the other areas. It was hard for me. I hate carpeting in living areas and especially in hallways. No kitchen update, no appliances, no bath updates. They told me not to even change out the faucets. :( But it sold over asking in 3 days.
So, maybe talk to some experienced agents in your area.
I think everyone has offered you great advice, the only thing I would add is whatever you decide, do not put down the vinyl plank. I do that in a lot of my rentals but only in sub-$120K units. I think it's a little lower end and you definitely don't see it that much (if at all) in homes in the $150K range. I put it in only because it's super durable, which really should not be a consideration for you.
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