Should rent go down the higher up the unit is?

Question

Should the 3rd unit on a stacked triplex be lower than the second unit and so on? If every unit is the exact same size and layout my original assumption is that each unit should be rented out relatively the same. However, I talked to a realtor today who told me there was no way I could rent out the third unit for the same price as the first or second because you need to climb up two stories of stairs to get there. Any thoughts on this? Thanks

Adam Martin · Answer

When I rented an apartment in college the top floor was the most expensive then middle then the ground floor which I thought was weird.  The top floors did have vaulted ceilings but I think the thought was there is no one above you making noise.  I was happy the ground floor was cheapest since I had a dog and it made it easier to let her out.  I had friends on the middle floor and top floor and both were willing to pay more not to live on the ground thinking it was a safety reason.  This was an open and large apartment where every unit had a balcony or in my case patio that led to the yard and the doors were all in an open stairway.  My friends that chose the middle did so since they thought that utilities would be cheapest since they were in between 2 units so bottom floor heat would rise up in the winter but not too much like the 3rd floor had which increased cooling costs.  I don't know if it was true or not but he believed it was so it was true to him.

Justin Phillips · Answer

@Kyle Marsh At the end of the day, it's all about supply and demand. Maybe allow for a slight decrease for the top floor, just to ensure you're running conservative numbers. Worst case, I don't think it would be anything drastically different.I will say, when a friend asks for my help moving, how available I am depends on what floor they live on ;)

Greg M. · Answer

I've never owned or rented a triplex, but I think the realtor is wrong. Many people would prefer to be on the top floor as they wouldn't have to deal with the noise of people on top of them.

Also, if floors one and two get rented first, it doesn't matter what you charged for them as they are no longer available.

Joseph Cacciapaglia · Answer

This will vary a bit by market, but in general I expect a premium for first floor units in buildings without elevators. The difference between 2nd and 3rd is debatable. Some people prefer not to have someone living above them, so would deal with an additional flight of stairs to avoid the noise. How drastic the difference should be depends a lot on your target market. If you're in an area where most renters are young people, the stairs may not be as big of an issue as in a retirement community.

Should rent go down the higher up the unit is?

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