Investor · Austin, TX · Member since 2020 · 223 posts · 83 votes
Hello everyone!
Appreciate your feedback and insight!
My business partner, who is also on BP, and I are building new builds and we have a location that we are disagreeing on what to build, in San Antonio. Would love your feedback!
With all being equal (new builds, same location that's ideal for young professionals, same quality), would you build a 2/2 (2 larger bedrooms + study), or would you build a 3/2 (1 large master bedroom + 2 smaller rooms)? And why?
We are planning on building and renting. Some of the highest sold prices have been 2/2.5, so it really got me thinking, could the rental market be the same? Local PMs have been rather useless as they're comparing apples to oranges giving us stats of 2/2 that's renting at $0.6/sqft and 3/2 that's renting at $1.3/sqft...
Real Estate Agent · Member since 2020 · 52 posts · 41 votes
5y
Great question!! I would recommend a normal 3/2 all the way unless you're shooting for a very small MF unit with a 1/1 on each side. Even then I would still probably do a 2/1 and 1/1. I really don't think it even comes down to the location and who you would be renting to. If you are building closer to downtown you will more than likely (although not always) leasing to individuals working in the service, entertainment or humanitarian fields. In this case you would likely be renting by the room. Therefore a 3/2 would be best. Contrarily, if you are building near the military bases or in more "suburban" areas such as further out on the NE or NW sides of town you will likely be renting the whole unit to a family. Of course, unless you build near a university. In this case a 3/2 still works best for a family.
A 2/2 unit for a stand alone home is just kind of awkward. Maybe if you provide a little more insight on why you guys are considering a 2/2 and the location I can better help.
Great question!! I would recommend a normal 3/2 all the way unless you're shooting for a very small MF unit with a 1/1 on each side. Even then I would still probably do a 2/1 and 1/1. I really don't think it even comes down to the location and who you would be renting to. If you are building closer to downtown you will more than likely (although not always) leasing to individuals working in the service, entertainment or humanitarian fields. In this case you would likely be renting by the room. Therefore a 3/2 would be best. Contrarily, if you are building near the military bases or in more "suburban" areas such as further out on the NE or NW sides of town you will likely be renting the whole unit to a family. Of course, unless you build near a university. In this case a 3/2 still works best for a family.
A 2/2 unit for a stand alone home is just kind of awkward. Maybe if you provide a little more insight on why you guys are considering a 2/2 and the location I can better help.
Best of luck!
Thanks Robert, so from your experience, you are seeing a young couple with no kids, or 2 professionals sharing a home, wanting 3/2 or 2/1, rather than 2/2?
Real Estate Agent · Member since 2020 · 52 posts · 41 votes
5y
Most folks that I have worked with either have kids or entertain the idea of having children in the future. My main point is that a 2/2 will limit your pool of potential tenants far more so than a 3/2.
Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
5y
I would go the 3/2 route. If someone is fine with a 2/2 a 3/2 will also work. If someone is in the mkt for a 3/2 your rental will not be considered if it is a 2/2. For me it is about casting the widest net. Also as more people are working from home the extra room can be an office.
Realtor · Fayetteville, NC · Member since 2019 · 97 posts · 109 votes
5y
I agree with the 3/2. We do STR's and our 3 bedroom properties do much better than our 2 bedroom properties. In the smaller properties, we get people that come stay for a weekend. In the larger properties, we get families that stay for a week or more. Not completely relevant but thought it was worth sharing either way.
3/2 gives you more options and more people that will be interested.