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Buy the Bungalow With Its Kitchen Intact
The Section 232 duty on imported kitchen cabinets and vanities sits at 25% and goes to 50% on January 1 2027, assuming it doesn't get postponed again. Nobody notices that in a $600,000 rehab. Using Cleveland for our example, where Redfin's median sale is $142,000 and the bungalows worth touching trade closer to $92,000, it is a real problem. A $9,500 cabinet and vanity package is a sixth of the rehab on a deal that size. The same order placed in January runs about $2,000 more.
Most rehabbers will buy the boxes anyway, because a resale kitchen buys an appraisal and no appraiser asks where the doors shipped from. We'd keep this kitchen. A host's reviews are won in the bedrooms and the bathroom, and the guest paying $158 a night is paying for the mattress and the shower pressure. So we'd refinish: boxes painted, fronts replaced only where broken, new hardware. Refacing is mostly labor, and labor does not clear customs.
The screen moves before the budget does. A gut with a ruined kitchen carries a line the pro forma did not have a year ago. The tired house with sound cabinets got cheaper to finish. Cleveland adds a filter at the end of November, when licensing starts and the city caps new short-term rentals in residential areas at 10% of the units on a block.
What we'd do: Buy the pre-1940 three-bedroom at $92,000 with its kitchen boxes intact, refinish instead of replacing, move the $5,300 saved into mattresses and the bathroom, and open the calendar in December. A kitchen past saving, or a block already at its 10% cap, makes it a resale, and we bid it as one.
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Hosting nets $1,808 against $1,318 on a lease, both costed self-managed with the same maintenance reserve. The $490 is what makes the extra $16,000 worth spending, and it also prices the kitchen decision: $5,300 not spent on new boxes, plus roughly $2,000 of January duty avoided, is about fifteen months of that spread. The buy comes off Redfin's Cleveland medians, and the nightly economics sit above Airbtics' trailing-year city blend of $123 at 61% occupancy.
Number are modeled, not from a real address.
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Most rehab budgets get built from national averages and a contractor's memory. RSMeans prices the work itself: more than 92,000 line items, each carried through a city cost index, so the same scope prices differently in Toledo than in Denver. Gordian's cost engineers put roughly 30,000 hours a year into researching and validating the figures, and the square-foot models are close enough to a scope of work to bid from.
Every release prices work collected months before it ships, so a trade that went short on labor mid-year lands in the next edition. Use it for scope and relative cost. Confirm the volatile lines with a live quote.
Free trial available. Core is listed at $367.20 a year, Complete at $944.10 and Complete Plus at $5,375.70
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01 — Columbia Falls, Montana published its 2026-27 budget numbers on August 26. A $600,000 vacation rental picks up $558.54 in city taxes while a $600,000 primary residence pays about $359 less. The rewritten state formula puts second homes and short-term rentals on a 1.91% flat rate. Same house, different use, different bill. Source→
02 — Riverside County supervisors adopted Ordinance 927 on August 25, five votes to nothing. The ordinance makes three citations a suspension and five a revocation, puts code enforcement on shift 7 a.m. to midnight, Thursday through Sunday, and removes the hour operators had to fix a complaint themselves. Noise has a number attached. Source→
03 — Freddie Mac's 30-year fixed average came in at 6.66% on August 27, a basis point above last week and ten above the same week a year ago. A year of forecasts, and the resale buyer's payment has not improved. Price the exit off that number and let the outlook decks argue among themselves. Source→
Worth Watching — Vrbo is piloting sponsored listings, paid placement in search results, with a wider rollout expected later this year and possible extension to Expedia. Occupancy has always been something a listing earned with photos and reviews. Budget for the version where it is also bought. Source→
Didn’t think cabinets could change the math on a flip? Reply with an unexpected cost you have experienced.
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The flip side of short-term rentals BUY IT · FLIP IT · HOST IT |