Is “cool” important to renters and can you get more for it?

Developer · Member since 2019 · 14 posts · 4 votes

Granted, I’m just starting off with this home buying thing. That said, style is important to me. I’ve built 10 artisan brick oven bakeries. 25 brick ovens. And a Food Truck Park with bar and stage, servicing 13 individual vendors.

I’d like to buy and rehab cool properties. Not your normal single family. But more like old brick buildings in the “Cork Arts District” and make exposed rafters type buildings into big city style lofts.

Will people pay extra rent if these places are hip?

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Jonathan GreeneBusiness Member

Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes

The general answer is yes, in the right area it can work. A hip and trendy area will rent or sell to a hip and trendy buyer, but based on what you said I get the feeling that your style might not be indicative of sale style. If you do things your way, you are looking for you as a buyer, which can work, but oftentimes people with artisan taste or over-reaching artistic vision customize the house too much for your market buyer and in turn, overprice it because they put their heart and money (and often too many upgrades) into it.

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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
6y
The general answer is yes, in the right area it can work. A hip and trendy area will rent or sell to a hip and trendy buyer, but based on what you said I get the feeling that your style might not be indicative of sale style. If you do things your way, you are looking for you as a buyer, which can work, but oftentimes people with artisan taste or over-reaching artistic vision customize the house too much for your market buyer and in turn, overprice it because they put their heart and money (and often too many upgrades) into it.
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Mark H. Porter
Investor · SC NC, VA · Member since 2020 · 1k+ posts · 756 votes
6y
Jonathan is correct. There will be areas where people look for that and will pay a premium, but how much of a premium is the question. A few hundred bucks a month or a few thousand a year will depend on how long you want to hold it and how much you sink into it. I always target a 2-3 year payback.
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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
6y
I agree with both of the above posters. If you have something "special", it could sell/rent for a premium but keep in mind you're really narrowing your potential customer base. I'd consider it similar to using strong paint colors in a property, some will hate it, some will like it but using colors that almost everyone finds acceptable will appeal to the largest group.
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Nicole Heasley Beitenman
Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
6y
Totally depends on the market. In a market with a larger millennial population, yes. If your renters are blue collar or older, probably not.
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Lien VuongBusiness Member
Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
6y
Yes but if this is a business you'd want to appeal to the masses if possible as you would cast a larger net of renters etc. On the flip side, if you go niche you have a specific audience who would pay higher but there's less of them.
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John Ball
Rental Property Investor · Chicago, IL · Member since 2020 · 10 posts · 1 vote
6y
@Eric James Slater you have to know the market and the audience within it. Not everyone would be into paying a premium price to live in a work of art. Sometimes simple, modern gets the job done. If you can, look at what other houses are selling for and the styles that they have. You could work off those designs and add in your own touch, but knowing what the consumer wants is where you’ll need to start.
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Heather Frusco
Investor · Union, NJ · Member since 2020 · 81 posts · 312 votes
6y
@Eric James Slater the short answer is YES, renters will pay more for an updated space and love amenities. However, just like any investment you have to weigh in the potential returns you'll see for it. But typically anything you can do to keep from being a labeled as a 'rental' and instead a 'home' you'll see an increased return, it's just a question of if it's worth it depending on what it will take to get that updated look.
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Greg Dickerson
Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
6y
Originally posted by @Eric James Slater:
Granted, I’m just starting off with this home buying thing. That said, style is important to me. I’ve built 10 artisan brick oven bakeries. 25 brick ovens. And a Food Truck Park with bar and stage, servicing 13 individual vendors.
I’d like to buy and rehab cool properties. Not your normal single family. But more like old brick buildings in the “Cork Arts District” and make exposed rafters type buildings into big city style lofts.
Will people pay extra rent if these places are hip?

Location is the first and most important factor For any type of property commercial and residential. You could have the coolest neatest product but if it’s in a bad location it will greatly affect the value in the demand. Location being equal then yes the cool factor can generate a premium for rent and for sale.
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Randall Weatherall
Real Estate Agent · Memphis, TN · Member since 2019 · 261 posts · 253 votes
6y
Just be mindful not to go overboard with it to avoid alienating too many potential renters, along with having the updates require too many years of additional income to pay off. Also, be careful adding high-heat ovens to your units and always check with local code to make sure those can fly. Otherwise, I love seeing out-of-the-ordinary rentals available as I feel that with the snowflake movement, a lot of younger renters are looking to move away from the beige and grey of everything else and not enough owners are taking the risk you're taking to grab them!
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Sean Bozigian
Realtor · Scottsdale, AZ · Member since 2017 · 66 posts · 36 votes
6y
I think a lot of it depends on your goal and overall strategy. This type of strategy can do be very successful with STR. When my fiance and I travel, we're always drawn to the "unique" and "cool" units. With that being said, if it's something that you plan to do operate as a long-term rental, I wouldn't pigeon hole yourself and make it too unique. You want to make sure you at least have a balance and it appeals to a broader population.
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Alvin Sylvain
Los Angeles · Member since 2018 · 464 posts · 471 votes
6y
@Eric James Slater
I disagree with the general consensus with caveats.
Define "cool". What you think is "cool" may be "weird" to someone else.
Of course you want to follow market trends somewhat, but generally you want the place to be as bland and non-descript as possible. Off-white walls, ordinary fixings, etc.
Just give your tenants permission to customize the unit to their taste (within reason). Let them make it what *they* think is "cool". Let them make it *their* home.
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Alvin Sylvain
Los Angeles · Member since 2018 · 464 posts · 471 votes
6y
@Eric James Slater
For example: when rented out my parents old house, Mom had all pink walls. Pink doors. Pink fireplace.
Several of our prospects didn't like pink. (Who'da thunk?)
Well, Mom (rest her soul) thought it was "cool" I guess.
After the first tenant (who suffered in quiet dignity coz the price was right), we got wise and painted everything a more neutral color. Not "cool" anymore, but no more complaints from prospects.
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Eric James Slater
OP
Developer · Member since 2019 · 14 posts · 4 votes
6y
@Jonathan Greene I hear that. It’s important to be practical and not too over the top. I’m sorta referring to the movements in the 90’s south side Chicago, to take old Printers Row industrial area and rehab it. Make it livable and cool. You see this in Milwakee and Brooklyn too, perhaps they led the movement.
I’m here in Jacksonville. It’s like the whole damn city needs to be rehabbed. But would touch downtown with a ten foot pole. That said, the funkier “hipper” part of Riverside has some cool building by the train tracks. They have a pretty cool art scene there too. So the question rephrased:
Is it worth taking old brick building perhaps used in industry, and turning them into livable apartments? Obviously the numbers need to be correct. But is the main hurdle the permitting/zoning?
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Eric James Slater
OP
Developer · Member since 2019 · 14 posts · 4 votes
6y
@Alvin Sylvain I like this actually. And have learned this lesson too... Building a brick oven bakery and obsessing over the details a successful restaurant owning friend simply said one day you know, “you are the only person who is going to notice that” and she was right!!!
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Eric James Slater
OP
Developer · Member since 2019 · 14 posts · 4 votes
6y
@Alvin Sylvain it makes sense. Not everyone wants to discuss Seneca and Warhol movements and the time periods they represent. Most, are perfectly fine with pastel colors of still life and office art work.
I’m more interested in being inspired. Like inspiring others. Seeing a space that may not have even been designated to live in (like a factory) and make it a dwelling.
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Eric James Slater
OP
Developer · Member since 2019 · 14 posts · 4 votes
6y
@Sean Bozigian looking up abbreviations and can’t find another explanation than “street parking” oh... I see, short term rental. Duh!!
Here you, and I agree. Funky little places work well with STR's. What about "shared living spaces? Almost a hostel but actually apartments. Could be cool, in an old warehouse?!?! Nicely done.
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Eric James Slater
OP
Developer · Member since 2019 · 14 posts · 4 votes
6y
@Randall Weatherall I agree! It can be pretty Birmingham as a renter. More so knowing that it’s prohibited to modify or change your rental only to invoke a fee when moving. I’m interested in living space. Functional hip spaces that allow people to be themselves without having to purchase “their style” themselves. Does that make sense?
1 Reply
Eric James Slater
OP
Developer · Member since 2019 · 14 posts · 4 votes
6y
@Greg Dickerson thank you sharing. It’s an interesting question. To be bold and build unordinary habitations!
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Eric James Slater
OP
Developer · Member since 2019 · 14 posts · 4 votes
6y
@Nicole Heasley of course. The location I’m speaking about is literally caked “arts district” with the hip, trendy, bars and clubs down the street. Only issue I see may be the permitting. As these spaces have never been lived in before. So it’s a complete redo. Think cool brewery. But, with bedrooms and shared spaces.
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Eric James Slater
OP
Developer · Member since 2019 · 14 posts · 4 votes
6y
@Lien Vuong again, I’m new to real estate for the most part. Sold it a bit for Remax in Nicaragua and rented dozens of spaces for brick oven bakeries in Central America. But, I’ve learned in business in general that having and holding a niche is quite audacious:-)
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Eric James Slater
OP
Developer · Member since 2019 · 14 posts · 4 votes
6y
@John Ball hear you man. I don’t want to create a hippy commune by accident. A bunch of entitled little punks who can’t hold a decent on to pay rent. Complain about everything and want mom, dad, and the landlord to bail them out of everything. Holding the tenant carefully is a must!!!!
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Alma Mills
Real Estate Investor · Los Angeles, CA · Member since 2013 · 98 posts · 48 votes
6y
My general advice is make your place something 90% of people will want 90% of the time. Meaning, if you do something unique make sure it won't be disliked or turn ppl off. I am reminded of rooms my parents painted in a rental that were green and blue. When walking potential tenants through they would comment on the color, at times asking if they could paint it. You usually get the best rents if the largest pool of tenants likes your place, thus more are compeating for your rental.
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Michaela G.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
6y
I've had good results with 'cool'. Either by installing cool/funky lighting, instead of the standard/boring builders grade lights. Not expensive - think IKEA track lights etc. I've often had potential tenants point them out on a walk-through
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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
6y
Originally posted by @Eric James Slater:
Granted, I’m just starting off with this home buying thing. That said, style is important to me. I’ve built 10 artisan brick oven bakeries. 25 brick ovens. And a Food Truck Park with bar and stage, servicing 13 individual vendors.
I’d like to buy and rehab cool properties. Not your normal single family. But more like old brick buildings in the “Cork Arts District” and make exposed rafters type buildings into big city style lofts.
Will people pay extra rent if these places are hip?

Yea to a point. If you're looking to get into artsy hip stuff you'll likely do a lot better if you flip these properties as opposed to turning them into rentals. Rentals work great when they appeal the the masses and are renovated in a way that allows for quick and easy turnovers going forward. Style will end up taking a back seat in those situations. So you'll get max return by selling it when it's styled out and looking pretty.
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