Granite or Formica for kitchens in rental unit?

[Michelle E.]

I'm a new investor and working on rehabbing 1 bedroom apartments in a 12 unit building. For the kitchens I'm able to salvage the cabinets thank goodness but not sure about upgrading to granite vs going with Formica. I would say these are B units in a B- or C+ area. I have 5 vacant units that I'm readying for rent. I'm going with vinyl flooring and ceramic tile which is coming out great but not sure if I should make the investment on granite for the kitchens. Any advice? Will it hold up well in a rental? My hope is this is a one time expense for at least a few years. What say you experts?

[Michael Hayworth]

Granite is a nice upgrade that should pull a little extra rent per unit without too much extra cost. It also allows you to use undermount sinks, which are also a nice touch. (Technically, you can also do that with laminate, but it's expensive and a pain in the ***.)  

You'll have 8-10 choices in Tier 1 granite. Names may vary by area and fabricator,  but they'll be things like Ubatuba, Santa Cecilia, Giallo Ornamental, White G and a handful of others. You should be able to buy that for $30-35/sq ft, plus cost of sink cutout ($150ish) and a good undermount sink ($150-200).

Laminate is going to be $15-20/sf, usually. It's likely that you don't have that much counter space in a 1BR unit. If you have 20 sq. ft of counter space, you might be looking at $300-400 extra per unit to do granite. That's pretty inexpensive to add a nice upgrade that should translate into increased rents and a higher value when you sell the units, based on the cap rate for your area.

You're in a blue state, so everything's going to be more expensive there, so the rates I quoted above may be a little light, but the cost differences between granite and laminate should still be roughly accurate.

Good luck.