I recently bought a second duplex on the same street as a triplex I own. They are functionally the same construction--1920s-built, up-down 2br apartments of about 1000 square feet each with front porches, and a finished third floor attic of about 600 square feet.
My first triplex came with a separately metered third-floor apartment which rents at $350. Apartments one and two are worth $700 apiece, rounding the rents out to be $1750/month.
The second duplex has been finished with plaster, a separate room for the bath. Water and drain pipes have already been plumbed for the kitchenette, so all that needs to be done is the installation of cabinets, sink, toilet, vanity.
The way I see it, I have a choice:
1. Finish the third floor bathroom and rent it as part of the second floor apartment. Extra rent: $200.
2. Finish the third floor as a studio apartment and rent separately. Extra rent. $350. Extra cost: $1000 or so.
The first and second floor are separately metered for gas and electric. I'm told that the city is unlikely to approve the installation of a separate meter, so any third-floor apartment would have to share electric with the second floor. Splitting the utility bill doesn't seem like something I'd like to deal with every month.
What do you all think?
I would look into getting approval for the meter and then judge the costs. that being said no meter no point. You cant split the utilities in my opinion as there is no fair way to figure out who used what.
Hello @Christian Carson . From everything you just said I would say option #1 seems like the best option in my opinion. It will make your second floor unit more desirable and you won't have to be splitting the utility bill and having to deal with that headache every month. Hope it helps in your decision.
without the 2nd exit point the city won't let you get the 3rd meter.
I'd finish it and add it to the up unit.
What relevance is your first property as a tri and your second as a duplex, which one are you considering renovating?
I'd not ever do split utilities, never, under any circumstances as you can get into utility regulations as a utility provider.
Not mentioned, the renovation costs, but you know that, especially in older buildings, ceiling joists are not sufficient for floor joists, even if the attic is floored, it may not pass standards as a living space. Average ceiling height must be 7' to count as living space, it may legally be less than you think.
I had a rehabbed Tri with the entire attic was an open living space for the front unit and two other units under were two story. It was great. :)
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing