New to Real Estate · Charlotte, NC · Member since 2019 · 39 posts · 11 votes
I purchased my first rental in a C class neighborhood. The house needs some rehab and I’d like opinion on:
- vinyl or stone tile in kitchen?
- add central air or replace window a/c?
- laminate countertop or quartz?
I am paying cash for the house and rehab, then will cashout refi when the home is rehabbed (giving me cash back for the next one). My lender, who is a flipper, said I should upgrade countertops and a/c so the appraisal comes back higher. He also said I could get more rent if I upgrade, which perhaps in a A-B class I could but is this true for a C class?
Hi @Sean M., if it's a TRUE C class neighborhood and your plan is to hold it long term, personally, I would go with the vinyl floor and laminate countertops in the kitchen... and would probably upgrade to a mini split for A/C vs. a window unit.
There is such a thing as over-rehabbing a property in an area, so try to see what the nicer homes in the neighborhood have and either match those or come close without over doing it.
If it were mine (excluding trying to pump the appraisal from the question because it's an owner/operator SFH vs flipping it).
Overall, I would be concerned with not over-improving it for the amount of rent it will attract.
First I would figure out the minimum that needs to be done to attract the average rent for the area (base on what the competitor rentals have that are getting that rent), and what (if any) modernization's (wall color, 3-prong outlets, Carbon Monoxide detectors, etc...) need to be done (to make it safe, and desirable to an average tenant in the area), then decide what "Hardening" needs to be done to it, to make turns, maintenance and ownership less costly.