1 bedroom units are much better than 2 bedroom units

1 bedroom units are much better than 2 bedroom units

Investor · Los Angeles, CA · Member since 2017 · 48 posts · 6 votes
I'm looking to invest in a supply constrained, rent controlled area with good market rent growth (ie, market rent growth significantly exceeds the rent control increase limits). I know in many non-rent controlled (or over-supplied) markets investors typically prefer longer-term tenancies, but that seems like a disadvantage in this situation. Given the rent control rules, the only way to take advantage of the strong market rent growth is to turn units ever year or two. Even factoring in the cost to turn units, it is still better regularly increase rents to market. So, given that, why would it make sense to buy units with more than 1 bedroom in this type of area as studios and 1 bedrooms typically turn much faster than bigger units?
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  • Real Estate Agent · Pittsburgh, PA · Member since 2015 · 1k+ posts · 846 votes
    9y

    1 Bedroom units turn a lot faster in my market and from what I hear they turn faster in most markets. 

    So if you are working in the cost of the vacancy and repairs/cleanup and you still come out better in the long run then go for 1 bed units. 

    I would still think that I'd prefer someone to stay for at least 2 years over most 1 and done renters. 

  • Investor · Los Angeles, CA · Member since 2017 · 48 posts · 6 votes
    9y
    Anthony Angotti Thanks for the post. Yes I agree, one year is a bit too short. 18-24 months is the sweet spot. I'm averaging in that range. I've actually i've moved to 15 month leases which helps make that happen.
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