Rental Property Investor · Omaha, NE · Member since 2017 · 43 posts · 35 votes
I just bought my first rental in Omaha, NE. It's a 3BR 1BA with 1900sqft. I'm putting about $6k into renovations, including rebuilding the bathroom from scratch and new kitchen vinyl floors. The house has about 1000sqft of gross carpet that is probably from the late 80s.
A couple people have looked at the house and asked me if I am replacing the carpets. Our plan was to spend our money on the updates we are doing, and replace the carpets in a couple years using cash from rent.
Should we stick to our plan and wait a couple years to update the carpet, or spend and extra grand on carpets now?
As with everything in rentals...go back to the numbers.
Is replacing the carpets now going to be financially worth it? By that I mean that if you spend $1000 now on new carpets will you recoup that in a couple years (I guess let's say 2 to make my point?).
You have to consider how much the super old carpet will effect your monthly rent. Let's say your ran the number and are hoping to get $1000 a month on your house. If you think you can get that despite the current carpet status then you should not replace the carpet. However, if we are looking at spending an extra $1000 in a two year or 24 month time period then that comes out to a cost of about $42 a month.
That means that if the old carpet forces you to reduce rates by more than $42 dollars a month, than you should replace the carpet. Or if you think that the new carpet will allow you to increase rent by more than $42 a month then you should also pay for new carpets.
*I am obsessed with finances and investments, so my above number ares not perfectly true. If you look at the opportunity cost of investing that $42 a month in let's say that stock market as opposed to the carpet, then the number are different. Assuming a $42 investment each month for 2 years with an interest rate of 7% compounded annually would would result in $1,043 dollars. So in this case the rent difference is actually closer to $43.50.
@Derek Janssen, reconsider the carpet in the bedrooms. I tile 100% of the floor. I can take ANY pet you throw at me, except maybe an elephant, and my floor will be ok. $500 per 'turn' via non-refundable deposit, every 2-4 years. Plus $25 a month pet fee. I don't make the money back, but I can expand my client base. And that is what it's about for me. I want to choose my tenants, not have them choose me. ;-)
Another thing to consider: This is PHOENIX. It gets hot here. Carpet retains heat. No carpet makes it a few degrees cooler in the summer time. Less electric bill for the tenants, less wear and tear on my AC units. All good.
BTW, I even have 100% tile floors in my rental in San Diego. Same reason. ;-) And I have it on my own home. Just add area rugs. ;-)
I'm with everyone saying to get rid of the carpet now.
I have a question though you didn't offer this info up front. So you've just purchased the property and are attempting to get it occupied. The original question was does changing the carpet now make sense?
Is there a refinance in your future?
If you plan on pulling your down payment, closing, holding and rehab costs out of the property once rented by way of a refinance then replace that carpet ASAP.
@Jeff Sechrest, I have PURPOSELY rented a property I purchased (that had carpet) to a woman who had CATS! EEEK. She couldn't find anyone who would rent to her and her cats (not the 'crazy cat lady, only 2).
My reasoning: I wanted to replace the carpet, but it wasn't bad enough to replace at that point. I couldn't just pull it up because I wanted to. That's a bad business decision. ;-)
So, I charged her a $500 non-refundable pet deposit, KNOWING that fluffy would piss all over my carpets. LOL. ALL cats do. It just depends how 'bad'. Anyway, she was with me 4 years. When she left I gutted the floors, TILE everywhere. ;-)
So she partially paid for my tile, in advance. ;-)
@Brian Washburn I have recently switched to Vinyl plank flooring. It's cheaper than tile and seems have a durable life span and if an area gets screwed up some how, its easy to replace.
If you decide to replace it you should look into pvc flooring. When i lived in Germany we had pvc flooring and it was amazing it looked like real wood and it was extremely durable I had a huge german Shepard and i never once saw a scratch in the floor.
Hi @Brian Washburn I would recommend doing it now. Have you also looked in laminate flooring. I have found this to be a better long term option. Best of luck!
@Brian Washburn
I’ll buck the trend here a little. It gets rather cold in Minnesota in the winter (and sometime spring and fall) and we have found that tenants really prefer carpet in the bedrooms. Laminate, vinyl or tile everywhere else though. It is so easy and inexpensive to replace carpet in a couple bedrooms every five years or so that we go that route. But we tend to have long term tenants that take care of the places (A class neighborhoods)
I just bought my first rental in Omaha, NE. It's a 3BR 1BA with 1900sqft. I'm putting about $6k into renovations, including rebuilding the bathroom from scratch and new kitchen vinyl floors. The house has about 1000sqft of gross carpet that is probably from the late 80s.
A couple people have looked at the house and asked me if I am replacing the carpets. Our plan was to spend our money on the updates we are doing, and replace the carpets in a couple years using cash from rent.
Should we stick to our plan and wait a couple years to update the carpet, or spend and extra grand on carpets now?
Hey Brian. I guess it depends on the rent you are earning, or could earn, with carpet vs, a different type of flooring. With that said, I would go with laminate or vinyl (depending on rent, quality of property), 9 times out of 10. Carpet gets damaged easily, and looks bad very quickly. Yes, you could get a good cleaner to come help make it look better, but it's not built to last for that long. Also, I will bet that in most cases, the bump in rent from changing floors, and the addition to property value, definitely makes it worthwhile.
I second that @Mark S. Being from Minnesota you gotta have carpet in the bedrooms. Nothing worse than waking up in the morning and stepping onto a cold wood floor or even worse, tile!
@Mark S. I agree. Bedrooms typically have less shoe traffic, food, and outside things tracked in. Carpet in bedrooms can last much longer and vinyl plank in living room and kitchens are they way we try to get the best of both worlds.
If it is just minor sloping and there are no foundation issues you could use a floor leveling compound then lay vinyl or laminate. If it is more than 1" of slope per 12' or you think it will continue to move with seasonal changes you might just want to stick with carpet. I'm not as anti-carpet as some people here seem to be but I prefer to put vinyl if possible. Stairs and bedrooms I usually carpet.
I am new here so I will try to keep short and to the point. I love how from the replies i read, anything most people considers is the ROI, "if it doesn't pay for its self its a waste of money".
How about consider the one part of this investment that could sink your ship, and quickly. You expect a renter to respect your IP, when you show you clearly don't. not only does it show you don't respect the IP, you don't care about the renters, so it seems so at least.
Plus people most anyway, try to keep new things new. move them into the old crapy carpet, then they might figure out why to take our shoes off, why let the dog out, why do I need an ashtray, etc
I might leave it there for the showings, anyone who was okay with it, back of the line, I want the ones who asked if it could be replaced, and I'm renting to the one who asks if they can replace it.
I second that @Mark S. Being from Minnesota you gotta have carpet in the bedrooms. Nothing worse than waking up in the morning and stepping onto a cold wood floor or even worse, tile!
For many years I lived in Russia, working over there, and most of the apartments had tile or hardwood or even linoleum in the rooms.... arghhh. All this on top of concrete. That sucked in winter, I can tell you. Of course, Russians would adapt and overcome by putting down big throw rugs. Carpet would be so much better in colder climates, at least in bedrooms.
@Brian Washburn Just my Two Cents here but most people like having carpet in the bedrooms since it doesn't look as dirty as hard flooring (i.e. dust/pet hair). I prefer to tile all living areas, bathrooms and kitchens with a wood-like ceramic and just put carpet in the rooms. As for the expense, hard flooring should be around $4 per sq ft installed and carpet will be much much cheaper. If you are worried about tenants messing up the carpet, just up the security deposit.
I hate carpet, but that being said... it 100% depends on your property, if the market will accept or reject it. If you rent a steam cleaner, and really clean it up, and it smells fine, it's a cheap fix-- but your price needs to reflect it. We have one we just re-did, kept the carpet in the bedrooms (C- area), put extra emphasis in the kitchen/bathroom, priced it correctly and the house was rented within 2 days. If it's a B or A property, it must be changed IMO.
Personally, I LOVE ceramic wood-looking tile. It's a HUGE PITA installation wise, but there is 0 stress afterwards. Got 5 dogs? Kids wanna try coloring it? go for it.. pet urine? no problem! It's like tenant-proofing a home! Cant' say enough great things about it!!!
@Brian Washburn why spend the money repairing and then keeping old carpet? If you want good tenants, then I would replace the flooring. I would suggest going with LVP vs carpet. This will end up saving you thousands in the long run.
Oh, and a lot of my properties are in Minnesota with wood floors throughout, including the bedrooms. I have yet to hear a tenant complain about wood floors in the bedrooms in the 10 years I have been doing this. I do hear a lot of compliments though on having the wood floors throughout.
I have tried to reduce the amount of carpet in my duplexes. I have a lot of 1900 build homes where the floors are not level enough for LVP or wood and then we use carpet. I like non-carpeted options because it reduces the need for me to schedule a carpet cleaner and that makes the turn over much easier and a bit cheaper. I'm paying 2 carpet cleaning bills today and they are $130, and $145.
I have tried to reduce the amount of carpet in my duplexes. I have a lot of 1900 build homes where the floors are not level enough for LVP or wood and then we use carpet. I like non-carpeted options because it reduces the need for me to schedule a carpet cleaner and that makes the turn over much easier and a bit cheaper. I'm paying 2 carpet cleaning bills today and they are $130, and $145.
Why not put that into the lease or mark up the lease by an extra 15 bucks a mo to absorb the cost?
I definitely recommend the vinyl plank. The flooring is such a large area of a home, and changing it makes such a huge impact. You may only have applicants that can't afford it because the ones who can are paying for the places that look nicer.
@Matt K. I already charge rents that make most landlords blush. if you look at my rentometer rent ratings my needle is buried to the right, there really is no more room to add it and I would argue if you able to add if you didn't charge enough, to begin with. That being an LL who can add it is not adding it they are just charging closer to the market rate and then that means they are still paying it as a cost to do business, because that $15 should have already been charged.
Either way, it's a cost that does not increase rental value so I think a LL that line itemizes that fee is only fooling themselves into thinking the tenant is paying for it. In reality the LL is paying and the tenant would pay that same rent if the floors did not need carpet cleaning.
Hopefully you have it in the budget to do a vinyl plank flooring. I put it in my powder room and at my entry and plan on doing it in my dining room, kitchen and two other bathrooms. Looks good, is sustainable and should last about 25 years. Since the carpet is that old and others have complained about it, I would replace it. If you put carpet in there again, it's not going to wear well for the next 20+ years worth of tenants. Spend the money now to get new tenants in there with the nice floors along with the updates you plan on doing. Well wishes!