Buying 2-4 Units when there are big Apartments Nearby

[Rick Albert]

Hello!

I am looking into some new markets to invest in. I typically buy 2-4 unit properties. The challenge I'm seeing is the development/existence of all the larger apartment complexes near these properties. As a smaller property, I can't compete except for price. 

Am I missing something? Any guidance would be appreciated.

Thank you BP Community!

[Frank Pyle]

You are not missing it but you are also not doomed. In Omaha the 2 to 4s can still win if they are in the right pocket, have better unit layouts, parking, yards, less noise, and you can run them like a clean quiet small community instead of a churn factory.

The big complexes usually set the floor on concessions and amenities, but they also have fees, stricter rules, and a lot of turnover. Your edge is targeting renters who want a simple place with a real person landlord, quick maintenance, and no junk fees. I would underwrite with whatever the closest big complex is actually getting after concessions, then stress test your rents a bit lower and see if the deal still works.

What parts of Omaha are you looking at and are you house hacking or buying as a straight rental? If you share a purchase price range and expected rents I can sanity check the numbers against what those nearby complexes are really doing.