4 and 5 bedroom houses?

Question

I suppose it is dependent on the area and the demand, but do you buy these houses for rentals?

Jon Klaus · Answer

I do. They cost more to buy and rehab, but rent for more, too.  I have 4, 5, and even a 6 bedroom.  Overall the ROI has been higher. Larger families and combined families have trouble finding bigger homes and seem happy to find my homes.

Ryan Pyle · Answer

I'm the odd man out on this one. I have found that with my lower income units that 3 and 4 bedrooms houses = LOTS of people in them = wwwaaaayyyy higher turnover costs. I prefer smaller 2 bedroom houses with no basements. The maintenance and turnover costs are similar to apartments-- although a little higher because one unit supports the entire roof, hvac system, plumbing system etc.

I go so far as to advertise and price my 3 bedroom houses as "2 bedrooms + den". That usually gets me smaller households.

I have not found it to take any longer to rent 2 bedroom houses. I have actually found the applicant pool to be higher quality because you get more older couples. Older couples = longer stays, lower maintenance costs and way lower turnover costs.

Keep in mind, my houses are in low income areas.

Rich Weese · Answer

I'm old enough to remember when 1brs became functional obsolete and REALLY high turnover. Then it was 2brs, imo, that became obsolete. Now I consider 3 brs the same. I try to buy and build ONLY 4brs. Just finished building a couple 4brs in so tx (where I've been buiding for several years) and appraisail has increased from 150K to 157K on most recent in less that a year. Good news! Rich

Ryan B. · Answer

You can make a ton on them with Section 8 but it will require a good deal of management.  That many people in a house has a way of causing a lot of maintenance issues.

If you can find a good family to rent it to, they will usually stay for quite awhile since it is a pain to move so much stuff and there are not usually a lot of rentals available with that many rooms.

Scott R. · Answer

I agree with Ryan,
I deal in lower income areas and my cream of the crop are 2/1.. mostly single mothers, 1 or 2 kids, the 2/1 work perfect.

Phillip Gainey · Answer

More bedrooms, more people living there.  More people, more damage.  3/2 is still the "standard".

How about size?  Many times the 4th bedroom is not much more than a closet.

Most 4 bd in the Midwest are early 20th century, TOC homes.  Built when families were large.  Only one bath (with claw foot tub).  If 100 year old homes are your thing, then okay.

Depends on your market.  Lots of boomers retiring looking to down size.  Not many large families anymore.  Except maybe lower income on welfare looking to rent 4 bedrooms in the older, more dilapidated part of town.

With the economy the way it is, maybe families doubling up in one home will be the new trend.  Sounds like a PM nightmare to me.

PG

Ibrahim Hughes · Answer

Here in NJ, anything 4 bedrooms and up should have at least 2 full baths (NOT 1.5 but 2). There are a lot of 4 bed, 1 bath homes on the market for sale and not moving. I would imagine that the same goes for rentals.

Kyle Meyers · Answer

I took a look at the average rents for an area I'm interested in getting more rentals and the increase in rents from a 3 bed to a 4 bed was dramatic. There aren't a lot of larger homes for rent in most markets so you can get a higher  rent. I would think, and a few people mentioned above, that because these larger houses are harder to find, the tenants you get will stay longer too.

Matt T. · Answer

Most of my buy and holds are 2/1.  Anything bigger and in a decent neighborhood I usually look to flip.  I'd love to have a bunch of 3/2 rentals but the higher purchase prices in my area don't fit my current plan.

Teresa F. · Answer

I have a five BR SFH rental.  The good news is that generally tenants stay a minimum of four years.  The bad news is that turnover is generally more costly than my smaller places and it takes longer to rent.  Because of its size 5/2 with full finished basement, I get many "groups" interested.  To keep maintenance to a workable level I limit occupancy to 2 persons per bedroom.

IMO buying 4+ bedroom houses depends on area.  In my area (Metro DC) I do better with smaller places -- condos, rowhouses, and 3/2 SFR.

4 and 5 bedroom houses?

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