Hello all. I own a duplex that I currently rent as a STVR. I am considering converting it into a single family unit(it will remain a STVR). What is your opinion on doing this. Do you think it will be more profitable as a single family unit or as a duplex?
This is not even close to enough info. We need some questions answered.
1. Where is it. Tourist area or a city or suburb?
2. Are both sides STR
3. How much is it bringing in right now
4. How much would it bring in if it were a LTR
The list goes on. My first though is if it's making money why bother. And would the city/county even let you do this.
My 2BR STRs and rented out all the time. My 3BR STRs are rented out about 50% of the time, but they bring in 50% more money. My 4BR STRs are rented out about 25% of the time, but they bring in 100% or more than the 2BRs.
At the end of the year we add up the numbers and subtract the expenses. They all make about the same amount of net income, regardless if they are 2BR, 3BR or 4BR.
My largest demographic renter is 2 guys that are friends. That's why my 2BRs are rented out the most. What is your predominant renters demographics? Make your STR fit that demographic.
Be mindful that sometimes you can't convert to a duplex if you change your mind down the road, zoning change etc.
I have not encountered one scenario so far where doing voluntarily turning a duplex into a sfh makes sense $ wise, not even hud rental.
2 nicely fixed units beat one.
I'm eagerly waiting on others input here.
What is making you consider doing this? We run a STR that's a duplex (2BR/1BA and a 3BR/1BA ) and I would NEVER convert it to a single. In fact, we've considered doing other STR in our area and really only consider multi-family properties since the return is so much better. Just like long-term, having both keeps us covered if something happens in one unit or if there's vacancy. Also, I noticed that despite only have 1 extra bedroom, our 3 unit definitely has more wear and tear. So I'm really liking smaller units as STR since they have been easier to manage in our experience, both from a cleaning and maintenance standpoint. Also worth mentioning, we're not in a tourist area. We're a regular college town with a decent influx of business travel as well.
@Chris Fowler , there is no way I would convert a duplex to a single family. Sell it and buy a SFH. A nice duplex should bring top dollar.
1)It is on Tybee Island, 10 miles east of Savannah, Georgia. It is definitely a tourist town. Savannah brought in about 3 billion dollars from tourism last year, with approximately 14 million people visiting. Those numbers are projected to increase over the next couple of years. Not sure exactly how much Tybee contributed to that number, but Tybee is more seasonal as it is a beach location.
2)Yes, both sides are STR.
3)I am averaging $4815.702 so far since starting in March, but am expecting some kind of decline as the season is coming to a close but not sure how much.
4) If it were a long term rental I think it would make anywhere from 3-4000 a month.
Paul Sandhu and Geraldo Holter, Thank you for your input. I was thinking along the same lines that 2 nice units will beat one but am interested to see what others experiences has been. Because it seems that SFH can command a higher per night rate, granted I haven't done as much research on that as I should.
Andrea Cole, I have been considering this because it seems that SFH can command a higher per night rate, but I think most of that is based on how many people it sleeps. But like you say, your larger units see more wear and tear, and that is I haven't really considered as we would likely be doubling its occupancy if we were to do that. Also, like you say, smaller units are easier to manage which is probably best for me, being new to the management side of things. Thank you for your response.
Thank you Michael Baum, that seems to be the consensus here is far. One side is recently updated (full Reno completed this year in March) I think I might start planning to do the other side now.