SHOULD I PURCHASE THIS PROPERTY?

Question

Hi BP world today I found a bank owned 1 BR 1 Bath 700sqft in excellent condition  with a Low hoa of 30 dollars monthly and at awesome price i'm a cash buyer investor and would like to add this to my portfolio but i heard i should stay away from 1 bedrooms.  Any one have any thoughts or past experiences with 1 bedroom 1 bath condos?  Thanks

Account Closed · Answer

Obviously depends on your market - a one-bedroom in a large downtown metropolitan teeming with single people / young couples is an easy rent.  A one-bedroom in a sprawling suburb full of families, on the other hand, is a much tougher sell.

Andrew O. · Answer

No!

Alex K. · Answer

I have a 4 plex of 3 2bd and 1 1bd units. The 1bd unit has high turnover but doesn't stay vacant as long as the 2bd units. The PM really does a lot of work for their money on that 4-plex but it's very profitable for me. The funny thing is the PM charges 10% for a SFR but only 8% for a multi-family. I say buy it if the price really is good and you will be using a PM.

Thom H. · Answer

Nigel, 
There are a lot of factors to consider and not knowing your market and further pricing and rental rates, it's hard to give much advice here. I have eight 1br / 1ba apartments in my portfolio (I agree with Tim C. above, there's not much difference between a 1br apt and a 1br condo.) Mine stay rented all the time in my market (as there is a shortage of 1 bedroom units in my area). However, recognize there is a tendency to have higher turnover rates with 1 bedrooms in most markets. It really depends on your market and the numbers...

Jared Orme · Answer

The reason Carlton Sheets and most other will warn you away from them is the cost factor.

Generally the upkeep is only 10% less than a 3 bedroom. From marketing to plumbing issues to service lines, to showing/marketing the vacancy, etc.

This cost 'issue' is compounded by the fact that 3 bedrooms are highly coveted. Even a single person usually wants an office nowadays at least and a one bedroom does not cover it. Additionally, a person renting a single bedroom will likely leave sooner due to advancement or family size increasing etc.

So basically all the same work for far less rent, with a couple of more expensive turn over rates... with fewer tenet pool to market too.

If you are going to spend time and money, usually it is better to pursue the more profitable and least problematic.

Hope that helps.

Tim Czarkowski · Answer

Maybe ... Depends on what you can rent it for. A one bedroom condo is really no different to a one bedroom apartment to a renter. I have several one bedroom apartments and they stay full. I'm sure it varies by market also.

Rob K. · Answer

I don't purchase condos, but I remember Carlton Sheets (I'm not a fan of his) saying he would never buy a two bedroom house or a one bedroom condo because they're too hard to rent out. I have several two bedroom houses and they are very difficult to rent out. Everyone has so many kids and step kids these days.

I guess if it was cheap enough and you could keep it rented, it would be a good investment. You need to find the right person to rent it to. Maybe a single elderly person or a recluse.