Happening NowCorporate / Furnished Housing

A plant expansion eight miles from a farmhouse that was meant to be a teardown

A scenario worth working through. An owner buys 22 acres for the land. There is a 1970s farmhouse on it, three bedrooms, sound roof, working well and septic, and it has been treated as a teardown nobody has gotten around to. Now a manufacturing expansion lands eight miles up the highway and the county paper says the contractor is bringing in crews on 4 to 9 month assignments starting in spring. The nearest extended stay is 34 minutes away and already full most weeknights. Rough shape of it: the house needs maybe $28,000 to be genuinely rentable, mostly kitchen, one bathroom, flooring and a panel upgrade. Furnishing it for four people would be another $9,000 or so, with a washer and dryer that can take real abuse. Long term unfurnished in a place like that is around $900 a month if a tenant turns up at all, and one might not. If the crews rent it furnished with utilities at, say, $2,600 for the house, that is a different asset than the one being ignored. If the project slips a year, $37,000 has gone into a building that was going to be knocked down. The open question is how contractor housing actually gets bought. Does the general contractor lease the house, or do four workers each pay rent, or does a staffing outfit sit in the middle? And who is the right first call, the contractor's office or somebody local? Selling to a company for the first time is its own learning curve.

nicole_adeyemi SS3APRO 13

Answer

diane_kowalskiServicePRO

The thing I'd want nailed down before spending the $28,000 is who the counterparty is, because it changes what you're building. A general contractor signing a lease for the house wants one invoice and a single point of contact and will accept plain finishes. Four individual guys paying you separately means four leases, four move-outs, and you're the one chasing the fourth.

On who to call, project superintendents usually handle crew logistics and they're findable once mobilization starts. The other route is whoever the county economic development office talks to, they generally know which contractors are coming and when, and they answer the phone.

The $37,000 downside doesn't scare me as much as the timing. Plant expansions slip constantly. Would the house be worth the money to you as a long hold rental at $900 if the project vanished?

diane_kowalskiServicePRO

2 replies

laurenkim53 PF4APRO 14

Rural furnished housing for crews is real money and it is hard on the building. A farmhouse run that way commonly shows eight months of wear that reads like four years of a family living in it. Steel toe boots on the floors and gear stacked in the living room, with someone frying something at 5am. Budget the furniture as consumable rather than as an asset. Also $2,600 sounds low for housing four earners. Per bed pricing is how the extended stays get there. Per bed also means running a rooming house, and that can pull in county rules on occupancy and septic capacity, which vary by state and by county, so check the local ones before counting the fourth bed.

laurenkim53 PF4APRO 14

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