Who would live in a fourplex ?

General Landlording & Rental Properties
10yFollow

Who would live in a fourplex ?

Jeff S.
Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes

My current REI goal is to buy and owner-occupy a fourplex. I totally get the numbers. But I still feel confused about the rental market.

My big question: 

WHO would choose to live in a fourplex? Who ARE those guys?  ( BTW, Name that film....)

In my market (Colorado Springs) it seems like anyone who could qualify for a fourplex unit could equally well just rent a unit in a big apartment complex.  In a complex, they would get ammenities like a pool, clubhouse, covered parking, and so on. No way I (or any plex owner) could compete.

The fourplexes I've looked at tend to have a rough feel to them : driveways/parking areas have deteriorated (or no) paving. Interiors are really dated. And yet vacancy rates are low.

So what is the appeal?   

In some areas, I've seen people parking their truck (always a truck) on the grass. I've seen garbage (mattresses, furniture, etc) piled up around the dumpster.  No apartment manager would allow that.

So I'm starting to wonder if there is a trade-off:  "I'll live in a fourplex (instead of an apartment complex) as long as I can be more relaxed about junk, behavior, tenant screening, etc."

Or am I missing something ? As a fourplex owner, what is the compelling advantage I could offer to a potential renter? 

1Reply
101 views

Most Popular Reply

Eric Brandt
Investor · Gatineau · Member since 2015 · 19 posts · 10 votes
10y

Every person has a different need and want in regards to their housing. For every person that may be attracted to the amenities of a larger building there is the person that wants nothing to do with a public pool and 200 neighbors.  

5Reply
See this reply in the discussion

29 Replies

Jump to latestLatest
  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    10y

    @Jeff S. the primary rule of investing is to "figure out what kind of tenants you want to deal with and only buy property they will rent." If you buy a 4-plex on a street of 4-plexes with trucks and cars on blocks under blue tarps and parked on the grass then those are the tenants you will get. If you buy a 4-plex near the hip urban core where the tenants can walk to local shops and watering holes you get hip urban dwellers. The responses here demonstrate this. 

    So my tenants like my four plexes because it's five steps to their parking spot, they can bike to work, I have a small outside space for their grills and washers and dryers in the units. My units are older and more cost effective than the large big box places. I have seen the kind of units you speak of all around and personally I wouldn't want to own one unless I got it really cheap and could turn around and sell it and make good money.

    0Reply
  • Jeff S.
    OP
    Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes
    10y

    Thanks, @Bill S.

    I've heard that advice (here on BP) and do feel I'm better off paying a little more for better tenants.

    My first (almost) deal was perfect in that sense.  I loved the property, neighborhood, price(!), neighbors.  But it got away.

    So now the area I'm targeting is a little more upscale than the more run down things I've seen around.

    0Reply
  • Sam Leon
    Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes
    10y

    Another consideration is location.

    My multifamily properties tend to be the only multifamily homes on the street it is on and so far I have only purchased a few that are within walking distance from canals and rivers.

    With the exception of one retiree, all my other tenants in those multifamily own a paddle board or kayak, and a bicycle.  Imagine carrying such items up to the 2nd 3rd floor and trying to fit a 12' paddle board in a room with 8' ceilings.  I have dedicated outdoor shed spaces where it is convenient for them to put away their odd size outdoor things, and that is a big factor.  They almost think of it as a "boutique" rental.

    Once you figured out your tenant profile, turn that into a competitive advantage...

    You can't discriminate, but tenants also like other tenants with common interests.

    "Laura, she is a scuba diving instructor...and Jim, he is always looking for someone to bike with..." does make a difference.

    1Reply
  • Dorothy Ma
    Investor · Denver, CO · Member since 2015 · 138 posts · 73 votes
    10y

    I own a fourplex and I cannot get it rented fast enough.  I think it mainly has to do with location since it's central to Denver near Sloan's Lake.  However, I have had people who need wheel chair accessible buildings view my units because the fourplex is a ranch whereas most apartment buildings are multi-story.  Also, our fourplex is on a large lot so one of my tenants owns multiple vehicles and what appealed to them was the additional parking spaces available that was not an option with their previous apartment building.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free