Three SF vs Three homes in one lot which one is better?

Question

Hello,

which one is a better option?

Three separate single family homes vs all three homes in one lot? What are some pros and cons.

Thanks

Eliott Elias · Answer

It depends on what kind of deal you are being offered. 3 homes on 3 lots hold more value, 3 homes on one lot should result in a cheaper purchase price and lower ARV.

Theresa Harris · Answer

Buying one building with 3 units (ie 3 units all under the same roof) has the advantage that you have one exterior, one roof, etc  to take care of.  With three separate buildings on one lot, you have smaller units, 3 roofs, 3 exteriors, etc and then three tenants all using one yard for which no one is responsible (the last two are the same regardless if it was one building with 3 units or 3 separate units on one lot).

Theresa Harris · Answer

Are you referring to a triplex or literally 3 separate homes on one lot?  A SFH will attract a different type of tenant than a triplex.  Triplex, you are more likely to get a similar tenant as an apartment and you will have to do the yard work and snow clearing (if applicable).  I'd also make sure each unit is individually metered and has their own laundry.

Sateesh Kumar · Answer

Thank You! It makes sense now. Between a triplex or fourplex on one lot vs a single family on one lot which one do you think will be a better option? Just trying to understand which one would make more sense in an appreciating market like CA.

Theresa Harris · Answer

Unless it is a larger lot, I would still go for a SFH on its own lot.

Sateesh Kumar · Answer

Yes , I meant three separate homes on one lot ,each with their own meters.

Three SF vs Three homes in one lot which one is better?

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