ROI for Kitchen Countertop and Appliance Replacement?

Question

Hi STR braintrust. Want to get your opinion on replacing countertops and appliances for this kitchen. Yes, the layout is unfavorable, but we are not planning to tear out any walls at this point. The cabinets will be repainted white. My question is should we go ahead and spend the cash to replace the countertops with granite or quartz and add stainless appliances before the listing goes live? The property is in Oak Island, NC -- 3/2 within 500 feet of beach. Planning to rent from $175 to $350 a night depending on season. Thank you for any insight you could provide!

Colleen F. · Answer

@Wes M. Stainless steel no. For beach rental they don't really care. Countertops and better layout yes. The other thing to consider is if you do something now and later you could wind up buying countertops twice. If you just do countertops you want quartz so you can match it if you retain any of the layout. I don't know about the pool 500 ft from the beach and a pool, would seem like a very area dependent choice.

Luke Carl · Answer

This is a short term? Where I come from that’s a long term. And yes it needs new countertops and appliances and paint the cabinets too.

Wes M. · Answer

That's incredible. I suppose that is something to consider down the line. If you are adding a pool to an existing property are financing it in some way? Some of the cost estimates I have seen are astronomical.

Glenna Wood · Answer

Adding a pool easily doubles your gross on OBX. Not familiar with the southern NC coast but I'd be surprised if it wasn't a major boost. Ten year ago OBX had fewer pools. Now to max rent people don't build w/o one.

Colleen F. · Answer

@Wes M. Appliances you can always do later. I would put that money towards rehabbing and furnishing well. White is not the only color for cabinets. If this is a beach rental slate blue cabinets and white appliances could make it really stand out. White on white, not so much. You can then get a nuetra( (white/off white quartz countertop) in the kitchen. You can put the stainless steel in later. Spend money on things that make the beach living easier, the right amenities.

Wes M. · Answer

Yes, lots of properties in this market don't have stainless, just white. I would like to set ours apart a bit -- especially if I could find a used set. Though these days, that seems to be near impossible. I do not want to do counters twice, so really trying to figure out what is best. We have also considered walking -- we're still under DD so can just scrap the deal if we have to. But, we have some comps nearby that have us walking in the door with $70 to $100k in equity, so it seems silly to let this one go. If we sink more money into the rehab our cash on cash return will likely dip below the coveted 20% mark, unless we end with increased revenue as a result of the additional kitchen rehab. Lots to figure out.

Wes M. · Answer

Glenna Wood · Answer

Boils down to "decent" vs "wow" right now. Impossible to know your options w/o seeing your floorplan and what else the house needs right now before placing in service. Is your rate average or upper end vs your comps? Yes the kitchen surely needs a total gut for upper level rates. Now or later? I wouldn't bother with a pass thru now but do work out a design for an island when you gut. I'll be the contrarian view that white appliances are not a killer in a beach house. They look to be in decent shape. Is that counter top solid surface? If it's in better shape, leave it for now and paint the just the soffit only with a matching color. Match the backsplash to complement the counter color but not expensive because long term you need to gut and redesign. White cabinets are a must. Convert a base cabinet for a pull out trash. That can in the corner in front of cabinets has to go. The other big factor is timing. Once your up and running it gets harder take it out of service for a major rehab. Also I've never had beach property were I could get major work done on time. Not enough good contractors and they have to deal with transient help. Does it have a pool? Adding a pool to a 500' from the beach house would be my choice over a major kitchen redesign and overhaul.

Bruce Woodruff · Answer

Try and get at least a 3 ft wide pass-through. Start it 42" off the floor and run it up to your (new) header. Use the same countertop material on it, make it 16" wide so people can pull up a couple of stools and talk to the chef.....

Wes M. · Answer

@Bruce Woodruff Yes, I am going to give it a go. May have to rearrange some other items budget wise. My wife and I were debating on waiting to do a more substantial kitchen overhaul, but I guess I should try to make it happen on the front end rather than a year down the road.