Two 1bed/1bath or one 3bed/2bath ?

Question

Hi,

I'm renovating a house, it's legally zoned for up to 4 units.

The current mix is:

ground+basement = 4bed/3bath + garden

2nd floor: 3bed/2bath

3rd floor: Two 1bed/1bath

I can change the third floor to be a 3bed/2bath or potentially 3bed/3bath and possibly give it roof access.

I estimate rents to be around 1300-1400 for a 1bed and 2200-2400 for a 3-bed but maybe vacancy will be lower / other considerations I should take into account?

There are two large universities, and I aim to target students / researchers and maybe families for the larger units

Thoughts?

Richard F. · Answer

The last thing I want is to give any Tenants, let alone student Tenants, access to the roof. Liability is bad enough without it. You would need a very secure railing system, properly installed to all codes, and you will likely end up with either stored items or a night time noise issue for neighbors.

Why do you want to change floorplan? What is the quality of current finish? Do you have laundry facilities in/on the property? Perhaps investigate a coin/card-op system to generate a little more income, from usage and additional convenience for existing Tenants.

Larger families is more wear, tear, and noise. How will that be for the Tenants directly below?

Patrick O'Sullivan · Answer

@Ron S., it sounds like you’re weighing cash flow against simplicity, and both approaches have merit. Keeping the two 1-beds might bring in more rent, but the extra kitchens and turnover can add hassle, while a 3-bed is simpler to manage and could attract more stable tenants. I’d lean toward whatever aligns best with how hands-on you want to be long-term, and it sounds like the 3-bed could fit that goal nicely.

Alan Asriants · Answer

It really depends on the following:How much will that improvement increase your value on the rental and appreciation side? You mentioned it will give you close to 900/m for cash flow. If it costs less than 87k could be worth it. Will it increase your value by the same amount or will you create "sweat equity." this will depend on neighborhood

Is the money you put into that renovation going to give you a good return? 7-8 years or less I think is best.

Does that improvement fit the local market or is it an "over improvement"?

Does that renovation trigger sprinkler system upgrade - could be a huge expense when not working with a shell.

Happy to analyze this with you reach out anytime

Drew Sygit · Answer

Massive party, drunk students, roof access, what could go wrong?

Jim Johnson · Answer

Good question — this is really a strategy decision more than a rent comparison.

On paper, two 1-beds may slightly outperform:

• 1-bed: $1,300–$1,400 × 2 = ~$2,600–$2,800
• vs 3-bed: ~$2,200–$2,400

But the bigger difference is operational:

Two 1-beds:

• More tenant turnover (especially with students)
• More leasing, cleaning, and admin cycles
• Vacancy risk is spread (one unit vacant ≠ zero income)

One 3-bed:

• Typically longer stays (families or stable groups)
• Fewer turnovers and lower management load
• Higher impact if vacant (100% vs partial)

Since you’re near universities, 1-beds can be very liquid, but also more transient. A 3-bed can work well if you attract a stable group (grad students, researchers, small families).

It usually comes down to what you want to optimize:

• Max rent + flexibility → 1-beds
• Stability + lower management intensity → 3-bed

Also worth considering: utility setup, noise between units, and how easy each layout is to lease repeatedly — those operational details often matter more than the rent spread.

Colleen F. · Answer

@Ron S.  Also two 1 bedrooms above the other units is probably a better fit noise wise especially if you are talking students.   Students who rent one bedrooms are more likely to be your more serious group such as grad students in my experience. And you may get your share of young professionals.

David Krulac · Answer

@Ron S. Sprinklers are expensive also. One municipality also requires sprinklers in new single family houses.  In Philly do they require internal fire escapes?

David Krulac · Answer

Some municipalities require fire escapes for third floor units.  I one where we did much work they third floor did not need a fire escape if it was NOT a separate unit, such as part of the second floor unit.  But require fire escapes if a separate unit was on the third floor.  Metal fire escapes add $20,000 or more , as obviously they have to be metal, durable and fire resistant.

Ron S. · Answer

Thanks David, this is in Philly and the building will adhere to new fire safety standards, and will not require an external fire escape (but will require sprinklers)

Richard Billingsley · Answer

I'd just leave it as is. I think having a diversified property gives you more options and attracts more tenants.

Two 1bed/1bath or one 3bed/2bath ?

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