Hardwood floors can sell a home faster than you can say "sold." A staggering 99% of Realtors say homes with hardwood floors are easier to sell and can actually add 2.5% to the sales price. That's because 54% of buyers are willing to pay more for hardwood floors.
Even though it makes for an easy sell, it's always worth considering the bottom line for the educated real estate investor. Let's go over the cost of installing hardwood floors, the various options you'll have, and the potential return on investment.
Cost of hardwood flooring
As with all remodeling projects, there is a wide range of products available, all with different price tags. According to HomeAdvisor (NYSE: ANGI), the national average cost per square foot for hardwood is $8, with installers charging $6 to $12 per square foot. That means the hardwood floors for your next house flip could cost you anywhere from $2,500 to $7,000 -- not exactly a low-budget item. However, keep in mind the National Association of Realtors found you will have a return on investment of around 70% to 80% dollar for dollar.
You can often find deals and steep discounts on hardwood flooring at home improvement wholesalers that have accumulated inventory, sometimes 50% off what the materials are actively selling for at mainstream home improvement stores. You may not have the widest selection of colors or styles, and you will typically have to purchase the whole lot. Still, even if you end up with a few hundred extra square feet, it will likely still be cheaper than going to a big-box store, and you could greatly increase your return on investment.
Options for hardwood floors
You will have to first choose between solid hardwood or engineered hardwood, unless refinishing original hardwood floors is an option. You'll also have to consider the type of wood you'd like to use, which can include:
- Engineered hardwood
Each type will have tremendous variation in color, grain, and plank size.
Lastly, you need to decide the installation method, including any specialty patterns like herringbone or parquet flooring.
The process of deciding which hardwood is best will likely be influenced by current trends in your market, availability of materials, your budget, and your project plan. For example, if you are rehabbing a rental property, wood floors will likely last much longer than carpet will, making the investment worth it. Wood floors can also potentially work for pet-friendly rentals.
Make sure to choose a floor with a high Janka rating (hardness or durability rating) to help minimize scratches caused by tenants moving furniture in and out. You will also want to look for types that are water resistant, because no matter how amazing the tenants are, accidents happen and you want to have a durable, long-lasting flooring material. Engineered and bamboo floors fit the bill well for this kind of rehab.
As with any improvement to an investment property, the quality and material selection should be influenced by market standards. If you are in a lower-income area, brand-new but lower-quality materials like vinyl flooring may still provide a huge bonus if most of the neighborhood has carpet. But lower-grade flooring in an upscale neighborhood would likely put your house at the bottom of the list.
Search around for some of the more exotic hardwoods to really set yourself apart. Although oak tends to be on the cheaper end of the spectrum, use caution, as floors with a yellow tint are often viewed as dated. Warm, medium tones or colors with gray undertones are trending right now.
There's a clear upside to installing hardwood floors in the right home and market. They are easy to clean, last a long time, and are in high demand for both flips and rentals. If your rehab budget allows for it, they can be a great investment with a reasonable return. But before installing, consult with a local real estate agent to get a feel for what the most common flooring is for the neighborhood. And if the property already has older hardwood, see if refurbishing and refinishing is an option, which will almost always cost less than installing new floors.