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Updated about 10 years ago on . Most recent reply

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Eric Hathway
  • Investor
  • Southern, NH
28
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99
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Deciding between a 3 unit and a 5 unit

Eric Hathway
  • Investor
  • Southern, NH
Posted

I am deciding between a 3-family property consisting of 3BR units and a 5-family property that are all 2BR units. They are roughly around the same price and profit about the same per month. Utilities are separated and paid by tenants in both.

Anybody have any advice on deeling with 5 units versus 3? I think the 2BR units would be more in demand, but then you have 5 units to maintain and more tenants to keep happy.

Hypothetically on a larger scale, what if it was an 8 unit property with single bedrooms. Easy to fill, but more maintenance calls?

Most Popular Reply

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Jeremy Pace
  • Contractor
  • Pittsburgh, PA
359
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Jeremy Pace
  • Contractor
  • Pittsburgh, PA
Replied

Obviously, there are a lot of factors that come into play in a discussion like this ... but strictly speaking, the more units, the more opportunity for profit gains, and the more insulation you have from vacancy.

Also, the condition of the properties could be a factor.  Old everything? New everything?  A neighborhood vs. D- neighborhood ?

One last thought ... a 3-unit is generally subject to less financing restrictions than a 5-unit, which would likely require a commercial loan.

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