Should I advertise a 4 BR rental townhouse as a 3 BR unit or a 4 BR unit?

17 Replies

I'm looking for feedback and opinions:

I have just acquired 2 units that are configured as 3-story townhouses 1500 SF each, in a side by side setup with full basements and private fenced yards and private driveways.  I don't have experience with large 3 or 4 bedroom units.   I was told when I bought the building that they were not "legal" 4 bedroom units, and could only be used as 2 bedroom units with "bonus rooms".  

The fire department has just inspected the units and blessed my use of the 2 bedrooms on the 3rd floor as sleeping bedrooms and stated that egress is sufficient and the building meets all the requirements of the code to be rented as 4 bedroom units.  They are putting it in writing.  

Now for the marketing aspect to my question.  I have been told that advertising the units as 4 bedroom units will attract a different class of tenant than I am looking for, (I don't accept section 8) and that I should never advertise them as more than 3 bedroom units.  The neighborhood is middle class and I would feel comfortable living there.  

Anyone have any experience with advertising 3 BRs rather than 4 BRs?  And do you agree or disagree with the statement that I should not advertise them as 4BR units?

Thanks, everyone.

Hi Ann, is it possible to do a split test ad campaign?  I would be curious as to the results. I am sure there are quality tenants that will pay more for the 4bd option. Perhaps a screening challenge but you got to figure the extra bedroom is worth the extra rent. 

Thanks,

Matt

Ann:  how many bathrooms?  

If you advertise as 4 BDR you might be exposing your application process to eligible families with 6 children.  Even though you might think that 7-8 people is too many for a one  or 1.5 bath unit, the federal guidelines don't require multiple baths (as far as I know). I'd not want to be in the position of getting applications from families with 7-8 members who are otherwise eligible.  Many applicants with large families are now fully aware that the application process cannot discriminate based on family size, and that you must use the same income and credit requirements for everyone.  Just something to think about.

It has 1.5 baths.  And yes, I am thinking about that, @K. Marie Poe, thanks for the input.  (Why can't I @mention you?  )

@Matt R. , yes the median rent in my town is about 280 more per month for the extra bedroom.  Maybe I'll think about the split advertising option and give it a little thought.  Thanks for the feedback.  Although, there are so few large units available in that area and a high demand, that most people would probably respond to both ads.  

Hi Ann,

I would advertise as a four bedroom. Anyone that needs three can live in four and have an office, storage, exercise room, etc. Anyone that needs 4 won't look at the three. It will give you more possible Tenants. It is up to you to screen and pick the best tenant whether it is a 3 or a 4 unit.  

best of luck, 

Anthony

Right on young lady. I think that you are in position to get the market value of the fourth bedroom, office or woman/man cave.

thanks, 

Matt

I’m in Chicago and also have a four bedroom house with 1 ½ bath. One of bedrooms did not qualify because it lacked a closet (but big room). At this time I did not know it was a disqualify bedroom. Anyway, I advertised the house as a 4 bedroom and was shocked at the number of applications with seven to eight individuals. I got applications from two families hooking up together to a foster mother with six kids! Each time I said this is 1 ½ bath house! So for me, based on my opinion and my market, I will now advertise it as three bedroom. I lucked-out because I found a tenant that works from home that needed lots of room (three individuals total).

I am not a landlord so when it comes to personal experience I am not the person to talk to, however from what I have read on all posts and specially what Mr Cruz said I think your best bet would be to lease it out as a 3 bdrm. Just think of eight or more people living in a 1500 sq ft with 1.5 baths, plus people that are searching for a 3 bdrm the majority of the time would appreciate the extra room.

If you are worried about getting applications with more people then don't advertise it as a 4BR since inherently it will attract larger groups/families.  Sounds like bigger units fetch a fair bit more money so if you are willing to have a larger family in their take advantage of having 4BR.

Are the 2 extra BRs roughly the same size?  If you have one tiny one you could do the 3BR + Office thing.  I have done that with a smaller unit where one BR was like 22x16 and the other was like 9x10.  I posted ads as a 2BR and a 1BR with an office to see what might appeal to different people and had it at the same price either way.

Also thinking about the number of occupants what is the state code there for that?  In MA I know that they have sqft requirements for both the total home and per bedroom for how many people can use it.  My guess is that it won't be pretty, but it would be good to know how many people can in fact live in the place if that is a worry about advertising it as a 4BR.

@Ann Bellamy  the elephant in the room of this conversation is that almost everyone is insinuating "you don't want too many people in your rental property."  I totally understand the logic, but it is still a violation of fair housing as family status is a protected class.  The fair and honest way to advertise is as a 4BR.

It is prohibited to "Falsely deny that housing is available for inspection, sale, or rental" by the Fair Housing Act.  Isn't that what you are doing if you say you have only 3BR available, but you actually have 4BR?  Do what you think is right, but I think if you advertise the property as a 3BR when you actually have 4BR to avoid attracting larger families is a violation of the act.

I agree with Robert. You should list the properties the way they are actually configured and may want to run your listing strategy by your attorney to make sure you are complying with all local regulations especially fair housing laws.

Sewer or private septic?

Good point, @Robert Leonard   and @Jon Deavers .  I'll discuss with my attorney.  The building is on sewer, @Kevin Goodwin .  

@Shaun Reilly  The town has advised me in the past that 70SF of bedroom space is required for each occupant, so that will limit the total number of people.  I'm more concerned with the quality of tenant than the actual number of people.  The utilities are completely separate, including the water/sewer bill, so that helps with the number of people.   I like your suggestion, but will check with my attorney about fair housing laws in advertising.  

Thanks for the feedback, all.  I hadn't thought of the fair housing aspect in the advertising.

Occasionally, when I am on the fence as to the suitability of a 4th room as a bedroom (it's really small, doesn't have much closet, etc) I will advertise as "three-or-four" bedroom" and let the tenant candidates make up their own minds about how it works.  Sounds a little odd but if the viewer decides, yes it's a bedroom, they are much happier with the configuration and I hear much less "you call that a bedroom." 

Originally posted by @Ann Bellamy:

Good point, @Robert Leonard   and @Jon Deavers .  I'll discuss with my attorney.  The building is on sewer, @Kevin Goodwin .  

@Shaun Reilly The town has advised me in the past that 70SF of bedroom space is required for each occupant, so that will limit the total number of people.  I'm more concerned with the quality of tenant than the actual number of people.  The utilities are completely separate, including the water/sewer bill, so that helps with the number of people.   I like your suggestion, but will check with my attorney about fair housing laws in advertising.  

Thanks for the feedback, all.  I hadn't thought of the fair housing aspect in the advertising.

I know of a good meeting tonight where they will have some experts you can ask some of these questions.  :) 

@Shaun Reilly , the property is in NH, not in MA.  Federal laws are the same, of course, and I was planning on bringing up the subject.  Funny you should mention it.  :-) 

Ann:  do the upstairs bedroom have built-in closets?  I agree with @Robert Leonard that you shouldn't advertise falsely.  But I assumed these weren't real bedrooms since you had to have them inspected.  Also, do the upstairs bedrooms have a heating source (vents or baseboard heaters in each room)? If you have rooms that really aren't bedrooms as per the definition of most housing authorities, I don't see how you are in violation when advertising the actual number of legal bedrooms and calling the other rooms bonus rooms. 

That being said, there are more concerns than just bedroom count when it comes to limiting maximum occupancy.  If you read the federal housing guidelines, it defines space and rooms that can be used as "sleeping rooms".  If you advertise a 1BDR, you can't necessarily deny occupancy to applicants that wants to use the living room as a sleeping space for someone, provided there is adequate total square footage for all occupants.  Legit ways to limit occupancy seem very limited indeed.  :)

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