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Should You Hire Hardwood For Your Rental?
Some of you reuse the same carpeting in multiple sweets because of cost but should you consider using different flooring for different buildings because of gains that could be well… gained by higher rents for the building?
I think it’s pretty cheap to reuse the same flooring in different buildings and store it in a warehouse because it’s unlikely that the same flooring works in different buildings.
Think of the quality of life of the tenant. Will they be happier if they had flooring that helped their mood?
Maybe you have to consider the rents for the area and not overdo your flooring but even so, optimizing flooring based on maximizing rents should be a possibility.
If you think of brand you could be known or your properties could be known for a certain appeal.
There are a lot of modern houses that seem to compete on being modern.
There are buildings that stick out in older neighborhoods and probably attract a better tenant willing to pay and brag about living in a place like that.
If rents are capped by government or the economy then don’t overdo it.
It could be argued that the flooring will just get damaged so it needs to be stain proof but isn’t that something that a tenant pays for with a damage deposit?
I’m not an expert in tenant agreements but these are just a few thoughts for flooring.
Maximize value.
Access The Flock.
Make money accessing cash buyers and motivated sellers!
Are floor installers licensed?
There are licensed flooring contractors. The licenses are state by state in the US.
In Canada there are Floor Covering Installer licenses and contractors province by province.
Should you install or refurbish floors yourself?
I guess that depends on whether you are flooring a house or a commercial building.
There are definitely pros and projects that handle larger commercial buildings.
You could touch up flooring on a house.
Or hire it out for maximum efficiency!
Let’s just consider the case of an installation:
Should you install hardwood or other types of flooring like:
- carpet,
- laminate
Which one would you choose for a 3 bedroom 2 bathroom 1,500 sq. ft. single family detached residence with a 20% cap rate in Ohio?
I don’t actually know the dimensions of the house that I just linked to but you can access that motivated seller!
With a 20% cap rate at around $35K, that’s $7,000 net operating income or call it close to cash flow.
So, cash flow would be around $583 a month if you use the cap rate and rents would be $700 a month if you use the 2% rule.
The 2% rule states how much of a property rents for per month to cash flow compared to the Asset Value:
Monthly
(2% rule) Rent: $700
Maintenance: -$117
Cash Flow: =$583
Now, I see why you are so weary of maintenance costs.
How much is carpet vs laminate?
Carpet: $0.34 per sq. ft. * 1,500 sq. ft. = $510
Laminate: $0.87 per sq. ft. * 1,500 sq. ft. = $1,305
And have, $117 a month * 12 *10 years = $14,040,
$14,040 - $1,305 = $12,735 leftover a ten year period for maintenance.
If you use the difference between the almost cash flow at $583 and 2% rule for rents at $700 a month you could spend $700-$583 = $117 a month on maintenance or operating costs.
$117 a month works out to $14,040 over ten years for operating costs.
Hardwood can be a great choice because it adds value to a house according to many hardwood installation professionals.
There are a few tricks to watch out for if you are installing your own hardwood. The first is whether you are installing on rectangle rooms or whether it is angular walls.
The difference can mean DIY and hiring a pro.
The other aspect to doing floors yourself is the clean up and disposal of the floor.
Professionals can dispose of the waste easily.
Types of Flooring:
There are many types of flooring.
Consider tile in more humid climates.
Carpet is a good sound insulator but hard to patch if there is a tear.
Hardwood is expensive and lasts a long time but can dent.
Rentals need more durable and neutral colored flooring.