Two or Three bedroom?

[Paulo Gama]

Hello BP community.

I am looking into single family homes in my area to purchase, then rent (investment).  The reason being the great schools and very low availability of home rentals in this area. Can folks give me positive and negatives between two and three bedroom houses?

I am trying to establish which home will be more desirable to rent based on bedroom count.

Thanks in advance for your help.

[Seth M.]

Originally posted by @Paulo Gama:

Hello BP community.

I am looking into single family homes in my area to purchase, then rent (investment).  The reason being the great schools and very low availability of home rentals in this area. Can folks give me positive and negatives between two and three bedroom houses?

I am trying to establish which home will be more desirable to rent based on bedroom count.

Thanks in advance for your help.

 Regarding rental income a 3 bedroom unit will no doubt command higher rent, but...the ease of finding potential renters at each size depends on your regional demand. We have a few rentals near a university in Northern MN. Rent is $400/bedroom for 2-4 bedroom homes rented to students. Cash flow is higher for a 3 bedroom vice 2. When you reach 5 bedrooms the per-room rate drops and turnover becomes slower, negating cash flow gains. 

Two questions we answered before purchasing:

-What size has shortest turnover (we discussed with local property mgr)

-Who are desired renters (college students, families)

By catering to your desired renter base you'll be better armed to evaluate available properties. Ultimately, I'd look at both and let cash flow make my decision.