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Whether you’re looking to fix and flip a property or rent it out, you can perform a flooring facelift for a faster, more profitable sale or lease. The same goes for multi-dwelling units, which can benefit from new flooring in common areas as well as individual apartments.
But your renovation will only turn heads, impress buyers, and add value to the home if you make the right flooring selections. In many cases, this means high-quality, hardwood flooring; luxury vinyl laminates; or bamboo alternatives.
A hankering for hardwood
Hardwood flooring has long been the top choice for buyers and remains so in today’s market. According to the National Wood Flooring Association, 90% of real estate agents say homes with hardwood sell for more. Similarly, a recent study conducted by the National Association of Realtors found that 54% of buyers were willing to pay more for homes decked out in hardwood.
Exactly how much value will hardwood floors add to a home or investment property? According to Realtor.com, hardwood floors add 2.5% to a home’s actual value. You might expect to get 70% to 80% of your investment back when you flip the house.
Investors looking to turn a profit may look for upgrades that will net nearly 100% return on investment (ROI). But the effect of hardwood floors on a home’s actual selling price may be harder to quantify. And there may be greater than cash ROI. That’s because 99% of Realtors say homes with hardwood are easier to sell.
If the other homes in the neighborhood all have solid hardwood floors, or even engineered hardwood (we’ll get to the differences later), trying to sell a house or rent a space with aging vinyl tile or worn-out carpeting might take longer than you’d like.
Investors lose money every day that a property is on the market or a rental unit is empty. To ensure a fast sale or lease, it’s important to make sure your property looks as nice as other houses for sale or units for rent in the neighborhood.
Flooring tips to stage a property for a faster sale
Hardwood is hot, no doubt. But what about other flooring options?
Since flooring runs across the entire home, it can make a drab space look fresh and inviting. Nearly any kind of new flooring can lead to a faster sale -- and a higher selling price.
Choose flooring styles and colors that flow from room to room to provide a consistent look throughout the space. That doesn’t mean you can’t mix materials. Just make sure they complement each other. You’ll also want to choose a style of flooring that matches the overall décor of the home.
If you’re doing a complete renovation, you may choose flooring first. The style and colors you select will drive other design decisions.
Whether you’re renovating a home for fix-and-flip or rental, approach design decisions as if you’re staging the home (because you are).
The home should look put together yet neutral, like a canvas on which the new homeowners or tenants can paint their future. People should be able to envision living in the house or apartment and adding their own touches to the existing palette of earthy tones.
If you’re flipping the house, you can let today’s styles and trends drive your design decisions. But if you’re prepping a single-family rental or multi-dwelling unit, choose designs and materials that will stand the test of time so the apartment doesn’t look dated the next time you rent it.
Remember, light colors make a space look bigger -- they also mask scuffs and scratches on hard floors. But if you’re installing carpeting, lighter colors will show more dirt.
In multi-dwelling units, focus on public spaces
In multi-dwelling units, consider improving public or community spaces first. As the first areas prospective tenants see, a good impression starts a showing off right. Look for durable, affordable materials that will look great now and for many years.
Many investors rely on commercial-grade carpeting tiles. If a spot gets worn, torn, or stained, it’s easy to swap out one tile instead of updating the whole room. Durable wood floors that can be refinished when needed also stand the test of time.
Four grades of building products
Building contractors and investors classify building materials like flooring into one of four categories. Knowing what each grade means can help you make the best choices in flooring for your investment property.
Affordable and readily available, builder-grade flooring includes vinyl tile, inexpensive laminates, certain types of linoleum, and carpeting with a five-year warranty. These may not hold up for very long in high-traffic areas.
A step up from builder grade, these materials cost more and last longer. Some styles of wood, vinyl, and ceramic flooring fall into this grade.
Expect to find custom-grade flooring in higher-priced properties, including luxury rentals and high-value suburban homes. Although it’s called "custom," it may not actually be custom-designed.
Custom designs made from the highest-quality materials and found in luxury estates are typically selected by the homeowner in collaboration with an interior designer.
Which grade of products should you choose?
The style and quality of flooring you choose will depend on:
- home values in the area,
- whether the property is a fix-and-flip or rental, and
- your overall budget.
Most investors opt for builder- or quality-grade materials as cost-effective options. Quality-grade flooring combines durability and affordability, making it a good fit in all but the priciest neighborhoods.
You don’t want to improve a house or apartment beyond the average property values in the area. Buyers and tenants still consider location first. The old adage of choosing the lowest priced home in the best neighborhood you can afford rings true for buyers and renters alike.
If you’re investing in a lower-middle-class area, affordable housing units, or even an Opportunity Zone, solid hardwood floors or other quality-grade or custom flooring throughout may not be appropriate. Consider builder-grade vinyl, laminates, or durable carpeting to improve the appearance of the property while keeping costs down.
In most neighborhoods, you’ll want quality- or custom-grade materials to keep pace with surrounding homes. Ultra-custom-grade products should be reserved for ground-up construction and selected by the buyer.
If you’re renovating a rental property, weigh the benefits of getting higher-quality materials for their durability versus saving money upfront.
Consider the inconvenience of replacing worn-out floors while you have tenants or the delays you may face if you have to rip up flooring between residents, combined with the costs of another renovation project. You may find choosing quality materials over builder grade will save money and time in the long term.
Flooring material options for investors
Once you’ve sorted out your budget and the quality of materials appropriate for your project, it’s time to consider the variety of flooring materials available.
Many of these flooring materials are available in multiple grades. For example, you can choose $0.49 peel-and-stick vinyl tile or stylish luxury vinyl for $5 per square foot or more.
Hardwood flooring comes in a vast array of options, including oak, cherry, hickory, and walnut. Prefinished hardwood flooring comes ready to install. Unfinished flooring needs to be sanded and stained once it is put down, adding time and labor to the project.
Hardwood is the most expensive choice to upgrade a home, and it may need to be refinished every five years or so. Because it can swell in moist, humid areas, or even if it gets wet from everyday use, it may not be good for kitchens or bathrooms, or in entryways that see a lot of snow and rain.
A popular choice if you want the look of hardwood without the high cost, engineered hardwood is constructed from pressboard, resin, and polymers, and then finished with a thin layer of hardwood.
Engineered hardwood is easier to install and withstands moisture better than solid hardwood. Rather than being nailed to the subfloor, planks lock together and can be installed over nearly any level surface, including concrete, solid hardwood, existing vinyl, or linoleum. Some types of engineered hardwood can even be refinished if the floor starts to show signs of wear.
Laminate floors refer to any type of flooring with a photographic layer beneath a clear coat. The photorealistic image simulates hardwood, marble, or stone for a luxury look at a lower price.
Like engineered hardwood -- which is a specific type of laminate -- vinyl laminate floors “float” over the existing floor or subfloor using tongue-and-groove installation. These tiles or planks may also be called “luxury vinyl tile” (LVT).
Most laminate floors are waterproof for use in entryways, kitchens, and baths.
Vinyl encompasses a wide range of flooring styles, including luxury vinyl tile and the vinyl tiles you may remember as a staple in homes throughout the ’70s, ‘80s, and ‘90s. Inexpensive vinyl tile may be a good choice in low-traffic areas like basements or in lower-priced apartments.
Popular in the ‘80s, linoleum is still used in some homes today. Like vinyl, it can come in sheets or tiles. It's not water-resistant like vinyl or LVT and may require a sealant coat. There are better options for most renovation projects, but if you're looking for an affordable flooring solution for a clubhouse or fitness room in a multi-dwelling unit, you may consider linoleum.
Porcelain and ceramic tiles remain popular in today’s kitchens and bathrooms. Tile is placed over a layer of thin-set mortar and then grout is spread between the tiles to keep them from rubbing together and possibly cracking.
Porcelain tile resists stains well and holds up in high-moisture areas. But you’ll need to re-grout every few years to keep the floors looking fresh. Porcelain tile is not as easy to install as vinyl tile. Like vinyl laminates, it can simulate the look of wood, stone, and other textures. As with other flooring choices, it’s best to keep tile colors and styles neutral if you’re selling or renting out the property.
Marble, granite, and slate are three examples of stone flooring. Ranging in price from $2 per square foot up to $50 per square foot for marble flooring, investors can choose stone flooring options to fit the budget of any project.
Granite and slate floors provide a unique look in a home. Because of their durability and affordability, they might be appropriate for a fix-and-flip property or a rental. Marble flooring would be reserved for custom applications.
Granite is known as one of the hardest types of flooring. Its durability and stain-resistance make it a cost-effective choice in high-traffic common areas, as well as living rooms and kitchens of multifamily rentals.
Bamboo offers a unique look similar to hardwood. This sustainable flooring material has gained popularity in recent years. With prices that rival luxury laminates and some stone flooring, it’s worth considering in fix-and-flip properties or rentals, especially in areas that place a high value on green building materials.
One of the most cost-effective choices in flooring, wall-to-wall carpeting in living rooms and bedrooms can make a space look new and inviting. Landlords may shy away from carpeting due to the maintenance involved, especially if you plan to allow pets in the space. But neutral-colored carpeting in a fix-and-flip can help encourage a fast sale.
If you’re looking to carpet a high-traffic area in a multi-dwelling unit, consider commercial grade carpet tiles. If one piece of 2' x 2' carpet gets worn out or stained, you can replace it with a matching piece in minutes. You can create an eye-catching design with different colors of carpet tile. Or choose a uniform color throughout and the seams will blend to give the appearance of solid, wall-to-wall carpeting.
Choosing the best flooring for your fix-and-flip or rental property
When you’re renovating a rental with new flooring, consider the durability and overall cost of ownership.
On the other hand, when you’re improving a fix-and-flip property for a fast sale, look at other homes in the neighborhood and deliver similar quality -- or slightly better.
New flooring, other than hardwood, may not improve a home’s value. But it will be one of the first things prospective buyers notice. The right choice can lead to a faster sale, increasing your overall ROI.
Unfair Advantages: How Real Estate Became a Billionaire Factory
You probably know that real estate has long been the playground for the rich and well connected, and that according to recently published data it’s also been the best performing investment in modern history. And with a set of unfair advantages that are completely unheard of with other investments, it’s no surprise why.
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