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Are there any downsides to engineered hardwood? I'm looking to install hardwood in dining room and kitchen areas.

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Generally speaking, the only downside is that you can typically only refinish (sand down and re-stain) engineered hardwood two or three times, because there is usually between 1/32" to 3/16" (0.6 to 4.5mm) of the actual hardwood layer, and the rest is plywood, fiberboard, or another hardwood.

You'll typically pay more for a thicker top layer, which means you're more likely to be able to refinish it more times, and more importantly, it will last longer.

Like most things though, you get what you pay for. With cheap engineered hardwood there are likely to be other problems (just like with cheap laminate or even real hardwood) including not using a good quality base, which will warp or absorb moisture, poor manufacturing quality causing the top layer to come off at the ends, or the tongue-and-groove not to fit together nicely.

3

A good grade of engineered hardwood flooring is an excellent choice. Far better than laminates and much easier to install than true 3/4 inch hardwood slats. As mentioned before, be careful in wet areas and always pick up spills immediately. I recently did a living room job with a Shaw product that was the newer style of "click lock" engineered hardwood. The fit and ease of install was amazing. The flush joints were extremely tight, even without the micro-bevel you see on most click-lock and engineered flooring. The three row pieces were 7'4" long, 9 inches wide, and it took less than 3 hours to install a 21ft X 14 ft area.

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Any engineered floorboards will be more susceptible to water damage in a kitchen or bathroom type of environment, obviously more so in a bathroom. Having said that, an engineered hardwood floor is better than a cheaper laminate floorboard and as @gregmac says, at least gives you two to three refinishes before it may need to be replaced. I certainly used engineered hardwood (oak 5mm) on our heavier traffic areas and it has stood the test very well. Also damage from dents etc can typically be repaired easier.

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