I've been listening to the BP podcast for a few months now and have read several of the BP books so im anxious to get started. I found a local single family property that will be a fixer upper for $35,900. Its a 2 bed 1 bath house that's only 950 square feet and other than some obvious cosmetic flaws looks like a pretty solid property. Am I setting myself up for failure with such a small property? Im pretty sure ill be limiting my options for tenants with such a small property but will this be a ongoing issue for me going forward? Just curious if anyone else has struggled with smaller houses. Thanks in advance!
I guess it just depends on your area and the numbers. If you feel like you'll have a strong market for a 2 bedroom product then I would say go for it. You'll probably have to rent to a single person or a couple as most families will want something larger.
We made a choice to not buy 2 bedroom houses as I wanted our rent to be at least $800 or more per property to justify the hassle. Once we set that criteria we started focusing on 3 bedroom houses. We do have some apartments units though that are 2 bedroom.
My concern with 2 bedrooms houses is that if your rent is only $500 - $650 range then where are you going to come up with the money for cap ex and maintenance, etc? There just isn't a lot left over at the end of the month/year. It's easier to tackle some of these things when you have $900-$1,000 coming in every month. My 2 cents.
My smallest property isn't much bigger than 1/2 that size! If the numbers make sense and you can rent it, go for it!!
Makes a lot if sense! Thanks for the response
@Jared Fannin I have 4 rentals that are 625 sq feet each. They are also 2 bedroom, 1 bath units. Honestly, 900+ sq feet seems like it would be spacious for a 2 bed rental. However, you will probably be renting to a more transient crowd who is less likely to stay multiple years. This is because your pool of tenants will probably not include families - 2 bedroom units can cause space issues and your tenants will have less stuff tying them down. They will be more likely to move which can mean more turnover costs for you. But that doesn’t mean 2 bedrooms aren’t good investments. They’re definitely less to maintain, clean and renovate when the time comes. Also, people will always need affordable housing. Go for it if the numbers make sense for you!