Hi BP family!
After having my first deal fall through because of a suspicious HOA with multiple lawsuits against them (Discrimination, etc), I have decided to change my strategy for what I am looking for in my first property. That being said, I am abandoning the single family homes for now and looking into multi-families. I am starting to check out Duplexes / Triplexes in the south jersey area (specifically Collingswood) for an opportunity to house-hack. My girlfriend @Antonina Cappello & I plan to live in one side and rent out the other.
We just missed an awesome opportunity on a duplex because I didn't act fast enough. The reasoning was this: each side only had one bedroom and bathroom, and I got scared that in the long term this could stop it from renting consistently.
My question is this: is this a rational concern or generally do 1 bedroom / 1 bathroom units rent as well as other units?
I'm going to preface this post by saying I'm not an expert so only take what I say as my personal opinion.. I agree with your concern regarding 1/1 units especially in the small multi-family arena. My opinion is that a 1/1 unit would only be for certain small demographic and probably only allow for a maximum occupancy of 2 people. I would think with more bedrooms you would have a bigger tenant demographic e.g. a small family or a single working professional both could rent a 2/1 unit but only a single working professional could rent a 1/1 unit.
Also as I'm sure you're aware, NJ is a very expensive State to buy property due to the high taxes and higher priced homes. I would think that you'll want to look for units that have multiple bedrooms so you'll be able to charge more rent and increase your cash flow.
@Tyler Martin My guess in Collingswood is that a 1/1 would still have decent demand but I would do some homework looking at rentals and talking with locals in the biz
@Tyler Martin I think it depends on your area and what you are looking for in a renter.
We currently house hack a one bedroom duplex close to a university and it had been great.
Pro- 1 bedrooms means only 2 occupants, so we don’t worry about sharing a wall with a family with loud small children. Most of our renters are young professionals, grad students etc. We always have lots of interest bc being a small 1 bedroom they can get into the neighborhood for one of the lowest prices on market.
Cons- more turnover. People don’t plan to spend many many years in a 1 bedroom. But like I said we don’t have problems filling it, even if rental market softens for the larger rentals at higher price points.
Just my 2 cents. It was a great way for us to get started.
Hi Tyler! I echo what @Blair F. says about only having two occupants. Especially since this is your first property, it may be easier to manage if there isn't a full family in the other unit. When we first began our search, we were actually targeting 1-bedroom units for this specific reason.
Collingswood is a GREAT area and I've been keeping an eye on the inventory and haven't really found anything that filled the "biggerpockets" criteria. What I mean by that is cash flowing enough to save for reserves like capex, repairs, vacancy, etc. so I'm interested in what property you're talking about.
Hey Tyler, i would typically agree that a 1 bedroom may not be as easy to rent as a 2-3 bedroom. However, in my opinion i don't think this will be as much as an issue in Collingswood specifically. Collingswood is highly desirable for singles and young professionals who work in the city because of Patco and local attractions (restaurant, coffee shops, bars, etc). Also, Collingwwood is on the up and up for sure and think the property will appreciate nicely.
I am also in SJ, we should connect!
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