Celebrating 4 Years in Business with Renovations

Choosing when to renovation when running a short, mid, or long-term rental is tricky. You have to weigh the need for improvement with the loss of rental income.

I’d been thinking about this set of renovations for four years, since I bought the house. January and February are typically the slowest months for bookings in the Ann Arbor/Ypsi area, and my contractors, Coffer Contracting, had a gap in their schedule, so we booked it! In total, the two renovation projects took 6 weeks.

The pain had been bad enough to make a move:

In my space, the first of the tri-level home, I didn’t have a kitchen. I was using my laundry sink as my kitchen sink, the top of my dryer to dry my dishes, the mini-fridge my parents bought for me to start college 20+ years ago, and an Instapot. I love to cook, so this was FAR from ideal.
Meanwhile, I had guests who would ask if they could use my washer and dryer, which was in my space. This worked out, but was awkward for both of us. I suspected I was loosing longer term bookings (1, 2, or 3 weeks) because of this.

So, doing the renovations became equal parts business strategy AND personal sanity saver. I wanted a new stackable washer and dryer upstairs and a kitchen for me downstairs!

Solving a Problem for Guests

This was the upstairs kitchen before the renovations. There were many large cabinets surrounding the refridgerator; more than necessary.

We decided to remove the excess cabinets around the refridgerator, move the fridge to the left and add a new stackable washer and dryer to the right, framing the new unit in custom-made cabinetry that matched my current cabinets. The biggest part of the job? New plumbing and electric needed to be run from upstairs to downstairs!

Here is a photo after the renovations were complete upstairs. Initially, we had planned to cover it behind a door, but the LG unit blended in with the black or black/sliver appliances, and the new custom cabinetry looked nice enough that we left it open. It is also more practical for guests. It’s very European to have your laundry in the kitchen. This is Hillside Manor after all!

Solving a Sanity Probem for Me

This choice was not a business decision in the short term. It was a quality of life decision. Long term, absolutely, adding a second kitchen, a utility kitchen, to the house adds value. Whether a future buyer wants to run it as a vacation rental, or wants a spot for their college student, or mother-in-law, my house fully functions now as two separate spaces.

I had a long, narrow laundry room with a window in it. It was already serving as my make-shift kitchen:

The design problem: how could we reenvision this space, maximize it, renovate to code, and turn this into an attractive utility kitchen?

Before I answer this question, spoiler alert: This renovation project was much more involved and more expensive than upstairs. It wasn’t just replacing a kitchen; it was putting a new kitchen in creatively in a rather small space.

Needless to say, I didn’t know where to begin. Jon Coffer suggested I send him photos of kitchens I like. That was fun. The vision began to come to life. I got to pick the fun things: the appliances, the lights, the cabinetry, the sink, faucet, shelves, flooring, and paint colors.

Jon and his team were excellent problem-solvers and craftsmen.

Problem 1: Their first design concept was great…except there was no refridgerator.

Solution 1: Knock down the walls to the laundry room, build a new wall using space in the living room, and add a knee wall next to the stove by the back door.

The Result? It really opened up the space. It allowed the soon-to-be kitchen to flow into the living room and look like it had been there all along. We could now have a full-sized refridgerator that also didn’t stick out like a sore thumb.

The new wall to enclose the refridgerator and the knee wall were both built here where there used to be a door and two walls.

Much further into the project, you can see the refriderator in its new home, how the knee wall was the right solution next to the stove (and perfect for a cat), and how this kitchen seems like it was always here.

Problem 2: What do we do with the giant water heater and plumbing?

Solution 2: Build a wall to hide the water heater. Build a door to this space (that plumbers…and my cats can open), and turn the water heater 90 degrees to its right, so future contractors could still access for service, and it would pass inspection.

The Result? Unless you knew this was once a laundry room, you’d have no idea there is a water heater in the space. It passed the inspection, and is a great hiding spot for my cats.

There were many other design problems, but these were the big ones. A few others:

We had to keep the space in front of the electrical box free, so there is no counter there, but after the inspection, Jon said I could bring over a movebable counter. The electrical box is getting a nice sponge painting soon!
When adding plumbing, the plumbers put the new pipes in so far that the W/D unit would stick out another 6 inches. We couldn’t waste that space. At Jon’s request, they came back and dug and dug to move their plumbing work back.
It was hard to find the luxury vinyl that matched my living room. It was no longer in stores. We found it at the manufacturer, but the way it snaps together underneath is different now. So, we had to separate the flooring and add a flooring strip. Jon didn’t love this solution, but I thought it was just fine.

All in all though, there were remarkably few problems once the demolition began until very near the end. The last small issue was the plumbing for the sink was delayed, so the sink didn’t work and I had to use my bathtub to wash dishes. Not so very different from my pre-renovation life though!

I’ve included a gallery of images at the bottom of this post with more of the renovation process and completed project.

Every time I think about the debt I’m paying down, I remind myself of the absolute joy of having a full-sized refridgerator, a stove and oven, cabinets, a real sink, and the butcher block and subway tile I so love.

What was the cost and how does running a vacation rental help me pay for it?

The upstairs project was just over $10,000.
The downstairs project was around $53,000.

No, I did not have all of this money. I could have saved for three more years to pay cash, BUT, I’d lose out on revenue in the winter months because I couldn’t have longer stays without a W/D upstairs, and I’d continue living like a college student in my 40s! So, here is how I funded this project:

After 3.5 years in the house, I asked to increase my HELOC based on how much the value of my home had increased. The HELOC went from $15K to $40K.
I used $15K in savings, put nearly $40K on the HELOC, and about $8K on interest-free credit cards.
I bought the appliances at Big George’s during their Black Friday sale and saved $7K on my very nice appliances. I used my Chase card to earn travel points, then divided the $8K between three interest-free credit cards to pay off between 9 and 21 months (one is complete).
I committed myself to a payment plan to pay my HELOC down in 2 years as well. This is debt where I am paying interest (7.7% at the time of this writing), so I want to pay it down as fast as possible. I pay between $1K and $2.5K monthly depending on the profits from my vacation rental each month.

10 months in, the financing is going according to plan. If it continues to, I’ll be done paying by December 2026.

The upstairs washer and dryer is a capital expense, ammortized over a few years on my tax returns. The interest on the HELOC is tax-deductible. And, I was incredibly happy to read this review in July:

Then, when a security contractor and his wife booked for two weeks in September, my longest stay yet…because they could do their laundry, I was delighted!

How is the short-term rental business going?

Occupancy is down these last two years. Our area is over-saturated with supply, while demand has not changed.
I use a dynamic pricing app now called PriceLabs, so my price per night is higher. In 2024, this meant lower occupancy but the same revenue. In 2025, it would have been the same result had I not closed the business for 6 weeks.
I still love the hospitality business despite having a few unfortunate situations occur this past summer:
- The first undisclosed party in 2.5 years (under age drinkers) occurred while:
  - I was on vacation with my family in Disney World. My cat sitter discovered it.
  - My house was smoked out. I had to cancel their reservation and stay on a video call with them until every guest was gone (or call the cops and wake up my neighbors).
  - It was midnight. I was talking to them from a hotel lobby in Animal Kingdom. Not my finest moment.
  - This episode cost me $1,300 including $750 in lost revenue from my next guests not being able to stay due to sensitivities to smoke.
  - It took three days of cleaning every surface in the house to get the smell out.
- Two weeks later, I had a guest who found a small drywall hole behind a large closet organizer that had been moved during the party. I didn’t know it was there.
  - Her 3-year old was convinved something had flown at her and hurt her finger in the night.
  - They left to stay at a hotel. I called my handy man to close the hole, but the guests also wanted pest control to come out.
  - The next day, the pest control company looked at me like I was crazy. “You know this is just an old drywall hole, right?” Yes, I did. They did a search and confirmed absolutely no pest activity (I have pest conrol visits quarterly).
  - The guests had booked for 5 nights. They came back on the third night. Their 3-year old still couldn’t sleep. They left for good, understanding that this time, it was their issue.
  - I still refunded several nights of their stay.
  - Luckily, these two instances occurred in my two highest grossing months in my entire 4 years. It could have been worse. Silver lining.