We're doing high-quality renovation vs landlord basic for a rental. Are we crazy?

Question

we're a few months into the renovation of a 1920 house in an upstate NY city.

we bought the house 2 years ago from a landlord with a poor reputation, and the house had some difficult tenant occupants who caused a lot of damage by the time they left last year.

We did substantial plaster repair work to the interior walls and ceilings. We refinished the hardwood floors. We're currently 3/4 of the way through re-wiring the house, to eliminate knob&tube wiring that was powered primarily by only two 15AMP circuits. We'll close up any remaining walls and ceilings once that is finished. After that we'll move on to the kitchen and bath, which are currently gutted and ready to go. The last project will be repairing and enclosing the large front porch which took a lot of water damage over the years. It'll add significant appeal to the house once that is completed.

We do a lot of historic restoration work and this will cost us over $50k to do everything, probably close to 75k. We're even using period light fixtures and paint colors to give the house a historic look & feel, which will distinguish us significantly from the competition.

Most investors I come across talk about doing cheap rehabs, using vinyl plank flooring, and contractor grade materials from big box stores. I don't really see the value of that if it means you get both less quality tenants and less money when the house goes on the market. Curious if others are doing what we're doing.

Tommy Reeves · Answer

Done 10 BRRRRs in Baltimore and the knob-and-tube detail caught my eye. I'm a former electrician and I do all my own electrical on every rehab. Every house I've bought in Baltimore's east side row house market has had knob-and-tube and undersized panels. It's basically table stakes at the price point I buy.

On the quality question, I think you've got the right framework but it's hyper-local. My neighborhoods are B/B- class, good solid working-class blocks but not trendy. If I install quartz counters and period fixtures in a Belair-Edison row house I'm not getting that money back in rent or at refi. My tenants are great people but they're not paying $1,500/mo for quartz. So I do solid but practical, LVP that holds up to heavy use, paint that isn't cheap but isn't premium, kitchens that look clean and functional. No penny tile, no farmhouse sinks.

What you're doing in a historic upstate NY city sounds like a completely different calculation. If you're in a market where buyers appreciate the historic character, the preservation approach probably pencils better on the sale side even if the rent premium is modest. Different math.

J Castro · Answer

Love this strategy — you’re playing a completely different game than the typical “quick flip” crowd.

What you’re doing is true value creation, not just a cosmetic rehab. Fixing major items like knob & tube wiring, restoring plaster, refinishing original hardwoods, and bringing back the character of a 1920 home puts you in a totally different category of product.

Most investors go the LVP/contractor-grade route because it’s faster and cheaper, but like you said, that often leads to:

• Lower-quality tenants
• More turnover
• Less differentiation when it comes time to sell

Lower-quality tenants

More turnover

Less differentiation when it comes time to sell

By leaning into the historic character, you’re attracting a more specific (and often better) buyer/tenant profile — people who actually value the craftsmanship and are willing to pay for it.

Where I’ve seen this really work well:

• Areas with strong appreciation or historic appeal
• Buyers who want “move-in ready with character” vs cookie-cutter finishes
• Rentals targeting longer-term, higher-quality tenants

Areas with strong appreciation or historic appeal

Buyers who want “move-in ready with character” vs cookie-cutter finishes

Rentals targeting longer-term, higher-quality tenants

The only balancing act (which it sounds like you’re already mindful of) is making sure the extra $50K–$75K in rehab is supported by your ARV or rental upside. As long as the market recognizes that added value, this approach can outperform standard rehabs all day.

Unfortunately not everyone does it this way because it takes more time, effort, and attention to detail… but that’s exactly why it stands out and works.

Curious — are you planning to hold this as a rental or position it for resale once it’s complete?

Henry Lazerow · Answer

$50-75k is actually still a pretty cheap rehab for a whole house. In low class neighborhoods the tenants destroy everything so want do cheap as possible, in nice areas you can do higher end. I work north side chicago and pretty much all my clients when rehab do pretty high end rehabs with nice quartz, nice tile backsplashes, etc. and it fetches high rents + increases building value. You obviously still want be budget conscious, buy cheaper SS appliances not the priceiest, etc.

Stacy Raskin · Answer

It sounds like the rehab will restore the property while bring out the historic and beauty in the property while making it functional. I appreciate historical properties and properties that have been well restored. I think on the financial side if you know your market and that there are renters that will respond to those finishes with paying more rent, it sounds like it makes sense financially. Renters if they are present in that market generally respond to properties that are well restored because it's a given that it should be functional or a landlord will fix it.

Matthew Banks · Answer

Thanks for your response! Our preference has been to hold but we'll see. Good Cause legislation is a real concern for us.

Eric Gerakos · Answer

The quality of the materials should reflect the property and tenant class. I don't install building grade materials in my A class properties because my tenants expect something better for the relatively high rent they pay.

We're doing high-quality renovation vs landlord basic for a rental. Are we crazy?

We're doing high-quality renovation vs landlord basic for a rental. Are we crazy?

Most Popular Reply

7 Replies