Two bed room vs one...what do you think!?

[Corey Lawson]

Had an interesting debate recently on what's better. Multi-family properties with 2 bedroom units or one. 

I'm in St. Louis, MO, but how thoughts in your market?

[Joel Owens]

Corey in most areas the 2 bed wins hands down.

The 1 beds tend to be harder to finance, have more turnover, less rental increases, to sell, and on and on.

1 beds do make sense for student housing and some senior communities etc. In those cases they can be a plus.

The problem with a 1 bed is there is no room to expand. Someone gets a partner, friend, child, parent etc. living with them and there is no room. With a 2 bed you can get creative with space and bedrooms more and it's harder to outgrow the space. With multiple people staying there the income is usually there to push rents higher each year versus singles.

On larger properties of hundreds of units I generally see a mix of about 75% 2 beds and 25% 1 beds ( maybe a few studio and 3 beds thrown in as well in small amounts).

You want variety but not too much of it to pick up the few tenants that will pay extra for a 3 bed. Not many will and they want the 2 bed.