Rental Property Investor · Syracuse, NY · Member since 2019 · 90 posts · 34 votes
I had this thought as I am house hacking (Syracuse NY) and want to make my unit nice with some upgrades. I am curious on people's thoughts on this topic.
Should you or should you not make your apartment that much different/nicer than the comps in the area (ie. appliances, counter tops, flooring, etc.) Is their a point where you don't "get your money back" ?
Hey Bryan this is a good question. The simple answer is yes you can make a rental too nice and you will at that point where there is no money back. The more complicated answer is that sometimes if you have a C type house in a borderline B/A location you can go and spend a little bit more money to make it more on the A side property. Spending a little bit more to match or surpass comps might work for you especially if there is demand for it. This requires some in depth study of the market and I would even look at trends to see if there is demand for more. In conclusion, keep it on the safe side and try to match comps but if you see the opportunity to make it a little bit better because of demand do it. On another note even if you make the house close to the comps try to add something unique to you and your style, remember branding is extremely important inn this world.
Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes
7y
100% possible. Renters usually don’t care about certain amenities. They’d rather have rent be 100 bucks less. That said, strive to over deliver ever so slightly on the product and charge juuuuust under market rent. Keep your tenants happy and turnover lower....hopefully.
Belfast, Northern Ireland · Member since 2018 · 128 posts · 56 votes
7y
@Bryan Cavellier you can make a rental too nice to the point where you don’t make any money because it doesn’t fit the area and therefore no body will rent it from you. However, if you are househacking you have to actually enjoy where you live so I would say make it as comfortable as you need.
Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
7y
@Bryan Cavellier - Like @Adam Fiore said, I focus on the most affordable, highly durable products I can get. I always use granite if I’m happy with the cabinets because my granite looks the same 10+ years later. I bought a house with 5 year old laminate counters and laminate floors and they were both already messed up by water to need to be replaced. I buy good looking vanities, light fixtures etc. on sale. I like to buy used bright white appliances that work and look good, usually when someone else is upgrading their kitchen for fashion. If I’ve got a concrete floor I’m going to do a wood look 6x48 tile at $2psf plus labor (usually all in at 5-6 psf and it effectively lasts forever - I’m often removing the fugly 30 year old pink 12x12 tiles in perfect condition.) or vinyl plank (life proof or similar). On plywood subfloors I like 3/4” hardwood or tile over Durorock. I use durable, wipeable paints. I screen my tenants like crazy to make sure I’m not inviting in a problem and if I do by mistake I try to get them to leave ASAP by giving security deposit back in cash the day they move out. If you have to replace it 3x in 10 years, the $3 psf isn’t cheaper than the $9 psf hardwood which would actually increase the value of your home.
Rental Property Investor · Columbus, OH · Member since 2018 · 97 posts · 66 votes
7y
@Bryan Cavellier
It most definitely is a thing to make it "too nice " but it also depends highly on what exactly your goals are.
If its strictly to raise the rent, stick with what's good for the area. If you're in a neighborhood where everyone else has window a/c units, for example, installing Central air isnt going to raise the rent the extra $100 or so a month to cover the financing (if you did that, just as an example.)
However, there are other ways besides money that can help make sense of it.
Maybe by making the unit way nicer than usual, you could convince a family to stay for a long period of time. I think I speak for everyone when I say that we want our GOOD tenants to stay forever and make our property their HOME for life. Spending extra to Make a property really nice is one way you can do that.
Another way it could make sense is if you were looking to refinance and wanted to get a higher appraisal. You have to be careful still with this one. Location still plays a major role in the overall value of a home. Installing granite countertops in a c-class neighborhood will get a slight bump in the appraisal, but probably not enough to even cover the money that went into installing it!
Rental Property Investor · Columbus, OH · Member since 2018 · 97 posts · 66 votes
7y
@Bryan Cavellier
How long are your leases? I heard about some investors in my area doing 24-36 month leases for their SFR's, and I really like the idea of doing that instead of typical 12 month leases. Would greatly reduce turnover
Real Estate Agent · Mesa, AZ · Member since 2017 · 231 posts · 169 votes
7y
@Bryan Cavellier yes you can definitely go to high. Find out what the market dictates and be on the nicer end to stay competitive but focus more on making the house “tenant proof” one of my clients made his house open to people with dogs and he just put new carpet that was very appealing at the price range. The dog destroyed it. So he switched it with LVP flooring which was just as desirable at the price range and will hold up against most dogs. Also everything is worth what you pay for it. So a tenant might see a house as only worth $800 if that’s their security deposit and care for it accordingly.
Rental Property Investor · Baton Rouge, LA · Member since 2017 · 78 posts · 26 votes
7y
@Bryan Cavellier Im dealing with this decision now as we speak. Making it more nice than other comps on the area will quickly get it rented out but will you get a return on your investment quickly is the biggest concern. Although knowing real estate is a long term investment we all want to see ROI as quickly as possible.
HIGHLAND, MD · Member since 2011 · 160 posts · 141 votes
7y
@Staneley Cesaire
Maybe the lesson you should have learned is to buy something that can be practical at the same time being more upscale. Ceramic top cook tops or ranges may look nice, but they are not tenant friendly or easy/cheap to fix when the top is cracked. Something stainless steel with heavy cast iron grates has the look of high end commercial but offers hard to damage use ability.
HIGHLAND, MD · Member since 2011 · 160 posts · 141 votes
7y
@John Thedford
Maybe real granite is to much, but the granite look laminates available today are amazingly realistic. If you upgrade tops and also have your installer attach a full height backsplash of the same laminate color under the wall cabinets it looks really high end for a value price. As a bonus it cleans super easy and won’t stain if you happen to have tenants that like to cook with grease or oil that can splatter.
Los Angeles, CA · Member since 2019 · 512 posts · 301 votes
7y
@Bryan Cavellier it is definitely easy to over do it. It’s not worth it in some sense. Like washers and dryers are generally not important. They need to function. But a kitchen where plenty of time spent, cheap appliances feel cheap so I think it’s worth it to spend a lil and get black or stainless appliances. If your going to get a nice appliance, get one with the least service call history. I think for the kitchen, kitchen aid and whirlpool win in that game.
Now upgrading like laminate counters to granite? Big waste of money imo. If the granite was there then congrats for you, otherwise not worth it on a rental unless it’s high end(then I doubt laminate would be there in the first place)
Anyways
Kitchen and floor I think are the most important.
Upgrade from carpet will always get you more potential tenants imo. Upgraded kitchen cabinets or restraining them goes a long way.
Upgrading blinds can also help make that cheap dreary look go away.
Los Angeles, CA · Member since 2019 · 512 posts · 301 votes
7y
Also I’m big on going cheap on dishwashers. They aren’t that impressive of machines, sometimes more expensive doesn’t mean better or doesn’t mean it performs better and they are a waste of money to fix. They don’t last as long as other appliances as well. Also you can survive with less functions no problems. Actually it’s nice to have a washer with all the options. Dishwashers just need to match
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
7y
If it’s A or B class then yes it wouldn’t hurt to have a competitive edge against other rentals in the area and you might get another 50-75$ for the unit
If it’s a C or D area I wouldn’t waste my time and money on such things . In lower income areas most people are more concerned with price and space .the nicer you make it the more you must charge to recoup the cost which drives your potential tenants into a smaller market pool . You want more bedrooms because that’s what rent is based on and you want as many folks applying because 95% of them will be losers so you need a lot of candidates to pick from .
Tenants will trash the units in low income areas . They never heard of a product called windex or a vacuum cleaner . They simply don’t care and will happily live in filth .im cleaning an apartment out now due to a turnover . She was section 8 lived there 4 years . Completely trashed out . Roaches holes in walls ruined carpet every wall needs painted broken vanity tore up vinyl floors . In one room it appears somebody threw a bowl of spaghetti into the wall and left it there stuck lol . Do you honestly think if I had granite counters custom wood cabinets garden tubs or high end flooring that it could be a benefit in this environment ? These people could care less
Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
7y
@Bryan Cavellier
I’ve had other landlords look at my apartment to tell me that I make them too nice but when they hear the rents that I get they start renovating as well I would say it’s up to you definitely pulled out some comps if you can go to some for rent apartments in your area you don’t want to be $25,000 of renovation costs above the nearest apartment unless that’s going to be justified in the rents that you get but sometimes you have to take a chance I think about it this way if you make a mistake with $20,000 and you put a hole in the property for 30 years it comes out to a few dollars a month and then on the next one you know what you need to do
Rental Property Investor · Syracuse, NY · Member since 2019 · 90 posts · 34 votes
7y
@Timothy Winfield i agree, hearing all these thoughta has me thinking it isnt a huge money ROI but a lack of headache ROI because of turnover and maintenance