High-end Renovations on BRRRR
Hey fellow BP members,
I've seen a lot of posts from buy-and-hold investors who talk about not doing high end finishes on a rental property. Though I am newer, this strategy is flawed in my eyes for several reasons:
-If you are hiring out contractors to do the work (which is generally the case), the cost is no greater when installing an expensive granite countertop versus a cheaper marble material
-The appraised ARV will be lower with lower-end finishes
-Your time return on investment is lower, because you still have the same scope of work (generally) for a lower profit
-Your exit strategy will be more difficult on lower-end finishes if you ever choose to sell in the future
These are probably obvious to anyone who argues not to go with high end finishes on rentals, so I really don't see the counterargument. My argument is that if you can do higher end finishes on a rental, why not? Not only will it commandeer a higher rent, but also rent quicker, which is an important and often overlooked metric. Maybe you can leave smaller details out, but planning a higher end rehab seems to be much more sensible in many cases. Obviously you need to be weary of the top-end rent that you could receive on a property in a particular market, but in most cities I feel that it is worth spending more on higher end finishes to really aim for that top-end ARV. Would like to hear other investors input on this topic.