Rental Property Investor · Member since 2018 · 21 posts · 8 votes
I have several options for construction of a Phase II project with townhouse style units. The existing (Phase I) consists of 7 townhouse units, 2bd, 2.5 bath. The property has 7 additional pad sites with water and sewer connections existing. I want the new construction to be 3 bd for increased rent value. The difficulty is fitting 3 bedrooms into the available space. I am marketing the property as Luxury and therefore don't want tiny bedrooms in order to add the third, but can make it work. Another option is a wider unit, but would reduce the number of units to 6 vs 7. The larger units would also have an attached garage. I anticipate the garage to add $50-75 monthly rent and increase marketability.
Constructing the additional unit will mathematically generate more income in the long run, but I am concerned the smaller bedrooms could be a negative when marketing as luxury. No other complexes in the area are marketed as luxury.
@Greg Clatterbuck Small rooms never do well. Is the area you are looking at family focused or is it a mix? A third bedroom is not normally needed unless it is in a suburb that has high demand for family. And will the 3rd bedroom be acceptable as a decent size bedroom? If not, better to not cram it in there as people will not believe it. Do a tour of the other new stuff that does have 3 bedrooms. If this one is smaller by more than 10% I would not go through with it. Hope that helps!
@Alex Olson Great thoughts. One of the reasons for wanting the 3 bedroom is there is minimal additional construction cost, but will generate $200-300/month additional rent. It is a growing area about 20 min from a larger city with overflow into this community. I think with redesign, I can get 7 units with 1400 ft2 and 3 bedrooms.
@Alex Olson Great thoughts. One of the reasons for wanting the 3 bedroom is there is minimal additional construction cost, but will generate $200-300/month additional rent. It is a growing area about 20 min from a larger city with overflow into this community. I think with redesign, I can get 7 units with 1400 ft2 and 3 bedrooms.
That should be plenty of room for a 3 bedroom luxury townhouse. 1400 ft is decent size.
I have several options for construction of a Phase II project with townhouse style units. The existing (Phase I) consists of 7 townhouse units, 2bd, 2.5 bath. The property has 7 additional pad sites with water and sewer connections existing. I want the new construction to be 3 bd for increased rent value. The difficulty is fitting 3 bedrooms into the available space. I am marketing the property as Luxury and therefore don't want tiny bedrooms in order to add the third, but can make it work. Another option is a wider unit, but would reduce the number of units to 6 vs 7. The larger units would also have an attached garage. I anticipate the garage to add $50-75 monthly rent and increase marketability.
Constructing the additional unit will mathematically generate more income in the long run, but I am concerned the smaller bedrooms could be a negative when marketing as luxury. No other complexes in the area are marketed as luxury.
You need to define small and compare th floor plab=n to other units. You should be able to get 3 bedrooms in 1400 sqft depending on the plan and whether or not that includes the garage which it should not. Also how many levels? 2, 3 or 4? Maybe you can go up instead of increasing the foot print. This is a popular model in my area but nit in every market.