Hey Everyone, I’m new to real estate investing. I’m interested in some duplexes in AZ but they are currently 1 bedroom 1 bath, 2 bedrooms 1 bath,or 2 bedrooms 2 baths. I have an initial fear of trying to find renters for these types of properties. Could anyone share there experiences on how difficult it is to find renters for these types of properties?
What fear are you having?
Before I started investing in real estate I asked every real estate and broker whether 1 Bedroom - 1 Baths were better better than 2-bedroom - 1-1/2 or 2 baths were better. I always thought it would cost much less and take less time to clean and paint 1-bedroom units. The answers I got from real estate agents and brokers was very mixed.
Later, after purchasing a 28-unit building with about 24 1-bedroom apartments and 4 2-bedroom apartments I found the answer. The 2-bedroom - 1 Bath or up to 2 bathroom apartments are much more in demand and easier to rent. There are many single renters who want a 2-bedroom apartment because they want an extra room for a variety of reasons.
In California, most apartment buildings for sale are sold for the number of doors regardless of how many bedrooms are in each unit. So, the cost 2-bedroom units does not necessarily cost more and you get about 20% more rent.
Thanks Jack! That makes a lot more sense. I can totally understand the two bedroom idea even with one person living there. Even for guests it would only be for a short time to share that second bathroom on a 2/1.
My biggest fear is purchasing a property and having it take 6 plus months to find someone to rent it out. I would like to minimize the amount of time I would potentially have two mortgage payments while I find someone for the units.
I don't hear about many landlords having problems finding tenants, anywhere.
We have several apartment buildings and my wife rents every unit. We advertise on zillow.com and get 3 to 6 leads every day. Our best source is hanging flyers at grocery stores and then Craigslist works very good considering it is free. I never hang 'FOR RENT' banners on a property.
If you are worried about how long it takes to find tenants then it appears that you might be on a tight budget. Even if you find tenants, instantly, you need to have enough cash in case your tenant burns you by not paying rent, thrashing the place, or moving out in a short period and thrashing the place. Not trying to scare you, but that is what I would worry about the most.
Call places for rent in your area and ask landlords how long it takes to rent units.
I have 59 units, 35 are one bedrooms. I bought whatever I could find for the best deal and one bedrooms must not be as popular with investors so I was able to find the best deals on them. The only time these sit empty is when I have them off the market to renovate. Now, I really like one bedrooms, they are mostly single young or old people, wear and tear is low, and they don't have much drama.
Before I started purchasing multi-unit properties I thought 1-bedroom apartments were going to be much less expensive and take less time to clean and paint, but it takes even a slow painter less than 1 hour to paint an extra bedroom and the cost for blinds and flooring is insignificant when compared to $300 per month extra for rent and that is $36,000 extra for rent every 10 years and if you have a 10 unit building that is $360,000 in your pocket every 10 years minus an insignificant cost for maybe a little extra for property taxes, the additional costs for a little more square footage for roofing every 40 years, etc.