Pros / Cons of Buying Four Houses on the Same Street

9 Replies

I'm considering the purchase of a package deal of four houses on the same street. There are 18 houses total on this street. 

What are the pros / cons of owning multiple properties this close together?

A potential con would be if the neighborhood goes bad, then all of your properties might not perform as well as you would like. I think most people would agree it is best to diversify.

What is your end game? Are you trying to rehab and sell? Keep and rent? 

If it's a transitional neighborhood and you're thinking of flipping, then I would consider selling 2 of those to other flippers, who you know will do a good job - unless you can do all 4 at the same time.

You can really turn a street around, if you have several properties that are nicely renovated. If they're all ready at the same time, they will help pull up all the values on the street. But if you were to do one at a time, it would be a slower sale and smaller price increase.

Just my opinion.

If some or all are adjacent, then you have the benefit of doing a lot line adjustment later down the road for redevelopment.

@Michaela G.   I appreciate your comments on helping the street. We own a rental and an extra lot on a small residential block and neighborhood. Circumstances dictate we not put much if any money into the rented house. Our plan is to spruce up the rental when the current tenants move out and build a house that's one of the nicest on the street. You've validated my hope that it will lift things up a bit. 

I also figure it will be easier to lease out a house that's one of the nicest- though not THE nicest nor the biggest.

@Ron Averill  

Been there done that.

I owned 4 houses, rentals, on a street of 20 houses and no other rentals.  I liked it was easy to deal with all 4 so close together, even though they were no adjoining.  One the tenant stayed for 13 years and 2 others I sold to the tenants, one after they rented it for 4 years.  All 4 were sold to owner occupants.

Another time I had 2 rentals on a cul-de-sac street with 22 houses.  I had the only rentals.  One I sold to the tenants after they rented for 4 years, the other also sold to an owner occupant.

I also had 28 properties, which were 27 were adjoining properties on 3 streets, and one was across the street.  17 were new builts and I was trying to control the area as I become the predominate "neighbor" to the new built development.  In the approval process that eliminated most of the neighbors objections, because I was most of the neighbors.

Of those 28 about 20 were sold to owner occupants and the rest are rentals.

I prefer to have SFH rentals in neighborhoods with little or no rentals. The first 2 examples above show that.

Thanks for all the great feedback! Here is a little more information about the current situation, which I should have provided in the original post. 

The four houses are all duplexes, and they would be rentals. Our strategy is to buy and hold forever, unless circumstances change in the future and indicate that an exit is preferable. We have multiple potential exit strategies. 

Most, if not all, of the houses on the street are rentals. We live in a college town, and there is consistently high demand for rental houses, especially among students. Duplexes tend to do as well as SFH's. These duplexes are very nice 3BR/1.5Ba on each side, and could be rented to upper level students, young professionals or families. There is a mixture of all these situations on this street.

I can think of some pros and some cons of having four houses on this same street. A few of these were mentioned in the above responses, and some new ones were mentioned that I had not thought about. I'd love to get even more opinions on this situation. If I decide to move forward, I'll be negotiating this deal in the coming week.

James, Thanks for the response. This makes perfect sense.

I was teasing my wife saying that we should eventually try to buy the whole street. Then we could cut continuous long strips with the lawnmower, saving all that turning time.

Originally posted by @Ron Averill:

James, Thanks for the response. This makes perfect sense.

I was teasing my wife saying that we should eventually try to buy the whole street. Then we could cut continuous long strips with the lawnmower, saving all that turning time.

Now that is economy of scale!

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633

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