rental units - 2 1BR or 1 2BR?
Hi, We’re looking at buying a multi-family house — is there conventional wisdom on which makes better financial sense–creating 2 1BR apts for rent or 1 2BR? We’ve considered that 2 1brs lowers our risk – what are the chances that 2 people will stop paying rent at once? or that just having a tennant…
Hi,
We’re looking at buying a multi-family house — is there conventional wisdom on which makes better financial sense–creating 2 1BR apts for rent or 1 2BR?
We’ve considered that 2 1brs lowers our risk – what are the chances that 2 people will stop paying rent at once? or that just having a tennant could make our lives easier – eg a 2BR, and would also lower our renovation costs as we’d need 1 kitchen and 1 1/2 baths as opposed to 2 kitchens and 2 full baths.
the house is currently configured with two 1BRs, so we’d be renovating on their footprints if we did that, but the units are currently crazy wonky and hard to imagine that they are up to code on any front . . .
also – is it worth putting on a roof deck to improve rental income??
Thoughts? many thanks!
ELM
Thnks – there are all very helpful responses!
Snezan: how do I contact you?
landlOrd: do I need to change to C/O to take 2 units for my family? we would knock down the wall between them and pull out one kitchen, but likely leave the plumbing intact (behind the walls?) – so if we ever wanted to move upstairs instead, or for wahtever reason, we could have the option of bringing it back to 2 units. in other words, it is currently a 4-family. i want to live in it as a 3-family. ?? thanks
keep it as it is. on top of all the good considerations made by others above, also keep in mind that changing C/O would cost you plenty.
keep the units as two 1 bedrooms… for instance… you can rent two 1 bedrooms in Cobble hill that are renovated for about $2000 a month. Even the nicest two bedrooms will rarely go above $3300. It will maximize your income stream. I disagree with the poster above, families can be great tenants because they are extremely stable. Kids are generally noiser though.
Maximizing your rental income is as follows: New or Stainless Steel appliances – washer and dryer – dishwasher – central air.
Roof Deck is awesome, but is difficult to quantify in dollar per square foot. More likely it will keep your tenants living in the apartment longer.
Do not worry about your tenants not paying rent. Use an established broker with an office and rely on their experience to bring you well qualified tenants. Or do it yourself, but then email me or speak to a friend with property management experience on how to weed tenants out. Hint, a credit check is the first step. Do not let people bring you their own credit checks. Get a score, but it’s more important to read the credit report to figure out their spending habits.
After renting about 1000 apartments, I can usually spot a good tenant in about 30 seconds or if they are someone I am not comfortable presenting to my landlords.
One thing to keep in mind… if you are having two 1 bedroom units, their heat/hot water costs will definitely be higher than if they were living together. Since you’re renovating, consider installing their own boilers.
Best
Snezan
Real Estate Broker
To be politically incorrect, it is better financially to sell to the larger pool of singles who are rarely home and more laid back, than to families with a young child who are home more of the time, make noise, consume more utilities, and have an opinion on all matters.
To consider renting to shares combines the worst of both worlds. You become the arbiter to their (shares) disagreements, while you host twice the traffic of guests, partiers.
I reaalize how bad the above seems, but your first step is realizing you are running a business.