I am amazed at how much apartment complexes are able to charge for rent. Here in NW Austin, a 2 BR duplex unit rents for about $400 per month less than a 2BR apartment in the same area. The apartment would is usually slightly more updated, but the duplex side includes a yard and 1 car garage.
For the amount that people pay for luxury apartment in North Austin ($1700+), one could actually rent their own SFH.
1) Anyone have any explanations for why the apartment rental market and duplex/SFH rental market are so different?
2) Anyone have any strategies for a SFH or duplex landlord to reach potential renters who would otherwise choose an apartment (at a worse value in my opinion)?
About me: I own and rent out duplex units in NW Austin, 1 year experience.
A couple of things. Apartments sometimes have good amenities such as a pool or fitness center. These amenities can mean higher rent.
Apartments sometimes have some part of the utilities included. This is reflected in higher rent to cover that cost.
Finally to many renters, having to do their own yard maintenance and shovel snow is a negative.
In my market single family homes almost always get higher rents.
IMO, duplexes tend to be in C-class neighborhoods. If I go to a neighborhood filled with duplexes or quads, the buildings are often run down and the tenants look to be c-class people. The apartment around the corner will have on site management that should keep the facility clean and safe. Clean and safe will drive up rents.
Most SFH in my area rent at 3-4 bedroom and are a bit higher than a nice apartment. To me they are apples and oranges. SFH and duplexes are for families. The nice apartments in a 4plex + are usually one and 2 bedrooms and are perfect for professionals and millennials that do not need a lot of Sq. Footage.
In an apartment you worry about not one thing. Also I think SFH's are much more susceptible to panic if they are unable to rent right away.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.