Remodeling a primary residence for rental potential

[Allyson Hudnall]

Hello everyone! My husband and I just bought our first home right out of graduate school. We have big plans to grow our investments and part of that path is through real estate investments. Step 1 is to live in the 1959 ranch home for 2-3 years before we make it a rental and purchase another home as the primary residence. That being said there are some much needed updates to the bathrooms and carpets that we will take care of the first year. I need some advice on the materials to use in these updates because I know they need to be long lasting and durable but I can't help wanting to put some nicer elements that may not be as renter friendly. We've been in rental grade apartments for 8+ years and I am so ready for an upgrade but is that wise with the plan we have to rent it out? My biggest debate right now is in tile vs wall surrounds. Followed by the second debate- Real wood vs lament. There is hard wood under the current carpet and it would be cheaper to sand and stain than install new flooring but I worry about the durability aspect when we rent it out. How do you keep the balance between making it your own home and making it rental worthy?

[Thomas S.]

Your decisions will be governed by whether you are doing this as a business or a hobby. A SFH will not normally have much cash flow and if selected in the wrong price range or area will have negative cash flow. You had first better make sure this property actually has the potential to be a rental investment, most do not.

From a business perspective if you do not prepare the property for tenants you will be flushing money down the drain. Either personal home or rental. Make your choice and move forward.

If it's a rental you plan all material to be tenant friendly. Tenants will likely beat the crap out of the place so you need everything to be bullet proof and cost effective.

If you are uncertain reno to suite your taste and sell to recoup your investment when it is time to move. You can not have your cake and eat it too if you want to maximise your investment.