1 bed den and 1.5 bath or 2 bed 2 bath for rental ?

Question

Hi Everyone, we have paid advance for a 1 bed and den with 1 and half bath condo which is $590k. Half bath is in the living room. Our plan is to live there for an year or two and rent it out. If we pay $80k more we can get a 2 bed and 2 bath but the caveat is second bedroom is like a bigger den which don’t have a window and the second bathroom is in the living room (not attached). Both the units have approx 300 sq ft terrace which a unique feature for a condo in NoMa, Washington DC. Which one is better for renting ?
Out thinking is that If it’s two bedrooms we can rent it two room mates and if it’s 1 Ben den we can rent it to a couple or couple with a child. But we will end up paying $800/month more for 2 bed. Any advice is appreciated.

Patricia Steiner · Answer

@Manichandra Sajjanapu

My reference to a bedroom not being a truly dedicated one was meant more generally; whenever a bedroom is without a closet, utilizes a powder or guest bathroom, or doesn't have a door (many lofts and bonus rooms fit in this category), prospective tenants and buyers tend to discount the benefit of that room - including using it for guests.  When in doubt, go with a 1/1...real 2/2 properties in my market are in less demand as rentals than the 1/1.  Hope this helps...

Manichandra Sajjanapu · Answer

Thanks @Aaron K. and @Patricia Steiner for the reply.

We are planning to stay at this place for a year and move out to suburbs or to a bigger place after that. @Patricia Steiner when you said 1 bedroom is a not a truly dedicated room is it because the bath is in the living room ?

Patricia Steiner · Answer

You pose an interesting issue...I had a client who bought every condo available in the SoHo area and thought that the 2/2 condos would be the easiest to rent and provide the greater return. That didn't prove to be the case. Especially when one bedroom isn't truly a dedicated bedroom, it becomes a push-back by prospective tenants. The 1/1 units were the most profitable overall in high rental price areas as that whole roommate thing has been replaced by "cohabitating."

And, as the previous contributor posted, buy for you - invest for others.  Recycling properties rarely works well - although I've seen some investors try really hard including drywalling in their unused formal dining room so it could be a room rental.  Made sense at the time to someone - not so much to prospective renters.

Aaron K. · Answer

@Manichandra Sajjanapu don't buy this property with the intention of making it a rental, because it would be a terrible investment.  If this is your primary residence purchase whichever option you would personally rather live in.