Multi-family rentals: 2 BR/1BA and up vs. 1BR/1BA or Efficiences

General Landlording & Rental Properties
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Multi-family rentals: 2 BR/1BA and up vs. 1BR/1BA or Efficiences

Chris Troutner
Lender · Olney, MD · Member since 2016 · 37 posts · 7 votes

I wanted to get some opinions based on experience with renters comparing 2-bedroom units (and above) vs. 1-bedroom and studios.  I currently have a duplex (each side is 2Bd/1Ba) under contract.  I'm looking at additional multi-family properties (Pinellas County and Pasco County, FL). My initial thinking was to try and stick with properties that a family could rent out, thinking this would be a more dependable tenant population. And a population less prone to trash my property. I have avoided looking at duplexes, triplexes, etc. that only have 1-bedroom units or studios, but I'm wondering if I should reconsider?  Single people need places to live too. I know it depends on many factors, but I'm curious about your experience with tenants and 1-Br and studio rentals.  Thanks!

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Bill Pate
Real Estate Investor · North Ridgeville, OH · Member since 2016 · 97 posts · 81 votes
9y

@Chris Troutner you need to learn how to screen tenants.  If tenants are trashing your units it's because you are not picky enough.  In 10 years managing my own properties I have never had someone trash a unit or even miss a rent pavement.  Personally I use a product called smartmove from transunion.  I tell the prospective tenants that I expect them to pay the $35 application fee and once accepted I will deduct the cost from their first months rent.  By doing this it really weeds out the people that aren't serious and it gives me instant visibility into credit, criminal, and eviction check nationwide.  Then I verify they have at least three times the rent in take home pay and I check their current residence for cleanliness.  This has not failed to produce a good tenant yet.  Sometimes the property stays vacant longer, but in the long run I have less turnover and fewer repairs when there is a vacancy.

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  • Brian Morrison
    Northbrook, IL · Member since 2016 · 26 posts · 9 votes
    9y

    One of my more dependable tenants is an older, retired woman living in one of my studio apartments. It's not just crazy kids who look at the small ones.

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  • Bill Pate
    Real Estate Investor · North Ridgeville, OH · Member since 2016 · 97 posts · 81 votes
    9y

    @Chris Troutner you need to learn how to screen tenants.  If tenants are trashing your units it's because you are not picky enough.  In 10 years managing my own properties I have never had someone trash a unit or even miss a rent pavement.  Personally I use a product called smartmove from transunion.  I tell the prospective tenants that I expect them to pay the $35 application fee and once accepted I will deduct the cost from their first months rent.  By doing this it really weeds out the people that aren't serious and it gives me instant visibility into credit, criminal, and eviction check nationwide.  Then I verify they have at least three times the rent in take home pay and I check their current residence for cleanliness.  This has not failed to produce a good tenant yet.  Sometimes the property stays vacant longer, but in the long run I have less turnover and fewer repairs when there is a vacancy.

    1Reply
  • Kim Meredith HamptonBusiness Member
    Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
    9y

    @christroutner they are all good unit sizes. I think a lot of it depends on the area. I know that Pasco does have a lot of retirees, so 1 bedrooms sound appropriate. Depending where in Pinellas, the area  tends to be more for the families. 

    Doing your due diligence on the front end helps to avoid the tenants you don't want

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  • Chris Troutner
    OP
    Lender · Olney, MD · Member since 2016 · 37 posts · 7 votes
    9y

    Thanks Bill and Kim.  I use a property management company. I was only asking anecdotally, what people experienced with certain types of unit sizes. This is good feedback. Thanks. I maybe should be more open-minded about unit types and trust the PM's screening process (after vetting the PM of course).

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  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    9y

    I'm with you;  2/1 or 3/2 for families.  They are more stable, tend to stay longer and find it more difficult to take off willi-nillie.  This was my niche market and I looked for MFUs near schools and shopping.

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  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    So figure wear and tear,, EXAMPLE for a 8 unit building

    2 br usually max of 4 people  that times 8 is    32 people with possible 32 cars,, 32 flushes, 32 showers, (hot water heater's aren't cheep) 32 people throwing out trash, 32 people using the washer / dryers/ and overall grimy hands on walls in hallways, and muddy feet on carpet.. usually more family type situations with smaller kids and more noise, more toys, and more people issues in general, like living in a jail they go bonkers

    1 Br usually max of 2 people that times 8 is 16 people,, so less of everything I'd take a 16 unit building much quicker than a 8 unit 

    Studio's  are simple but rare to find a building with just studio's they are the best,, in my opinion.

    I have 4 studios and love it

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  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    9y

    @Deanna McCormick, @Chris Troutner

    Your experience Deanna is totally contrary to mine - - perhaps Location plays a big difference.

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  • Geoffrey Schnake
    Property Manager · Saint Petersburg, FL · Member since 2016 · 113 posts · 87 votes
    9y

    My 1 bedroom units in St Petersburg are great. less wear and tear and tenants seem to stay longer, I think because there are not as many units to choose from . 

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  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    @Jeff B.

    Well experience was in a 320 unit complex I managed,, 1, 2, 3 br units,, lots of  people was busy...18 buildings.

    236 unit with only 1 & 2 Br units was easier.. but still to concentrated.  6 buildings

    120 units with ,studios, 1 br's and 2 brs,  9 buildings ,, was nice size.. easy to rent, not to concentrated and was fun. 

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  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    9y

    @Deanna McCormick 320 units is TWO full time jobs.  Being an absentee owner, that would have been a nightmare for me.

    I would have borrowed by dad's Smith-Wesson and ended it all.

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  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    9y

    @Jeff B.

    i did have help but still with that many units it was like a small city..our office was open every day for leasing,  we had our own security staff,( after hours), and office staff was like 7, maintenance guys 4 (understaffed at all times) and 2 painters, and a handful or 2 of caretakers.. it was a section 8, tax credit property.. yup after 4 shootings, a stabbing and a murder.. I made a change after a year. 

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  • Nancy Wilbanks
    Real Estate Agent · New Port Richey, FL · Member since 2016 · 37 posts · 6 votes
    9y

    Hi Chris

    Looks like you're getting a wealth of info here...so happy about that.

    Just wanted to pop in and say Hi and let you know that I am an agent here in Pasco and Pinellas counties and would be happy to assist in any way that I can. If you find yourself needing an agent or just someone to run the tenant screenings feel free to shoot me a message or give me a call. 

    Best of luck to ya and 

    Happy Thanksgiving!

    Nancy

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  • Chris Troutner
    OP
    Lender · Olney, MD · Member since 2016 · 37 posts · 7 votes
    9y

    Thanks Nancy.  Yes, Always great info and help from the BP community. Thanks to all! And Happy Thanksgiving.

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