1 bed/1 bath vs. 2 bed/2 bath

7 Replies

What are your thoughts about 1bed/1bath condo versus 2bed/2bath?

My client is debated between buying a 2+2 and renting one of the room or buying a 1+1.

My take is that the price difference is too thin to justify the difference in utility and versatility. A no brainer to me: I would go just for a 2bed/2bath.

Thanks

@Clark Kirkpatrick thanks for the reply! Well it is Orange County, CA so you can rent out a room and bath (depending on the area) between 600 and 900. Monthly payment with 3% down is about 2300-2400, so realistically you have to pay out of pocket around 1600 to 1800 a month. And that’s almost your monthly payment if you buy a 1+1 with 3% down.

My question was more if it is a better investment in terms of appreciation to buy a 2+2 or 2+1 instead of a 1+1.

Ah, now I understand better. Didn't realize it was such an expensive market. I have to believe 2+2 is more desirable in general, and therefore would appreciate better.

If nothing else, the client would have a more valuable place instead of a less valuable place, and they wouldn't pay the difference - the tenant would.

@Luca Giani

I would say depends on the market but larger is usually better

In Toronto they rent like hot cakes because they are usually rented to 2 parties sharing the unit.

It really depends on the exact difference in price.  If you are looking for appreciation 2/2 will be better. It will attract a larger buyer pool in the future. A 1/1 works well as an investment because the cost the acquire is much lower and you have a better chance to cash flow.  Could be different in your market but this is what I see here in the Bay Area. 

1/1 less headaches with less tenants. I love mine. It performs very well and the cash flow is strong. The only downside was it decreased my tenant pool drastically.