I am looking at potentially restoring a 1915 brick 2-story home. It was converted into a duplex with exterior access (exclusively) to the upper space. My hope is to leave the exterior access and simply reopen the original wall/case and add back a few stairs to that landing. The home also has two heating/cooling units and two meters. Not sure if there is a benefit to keeping/using/removing.
Just wondering if you all have any advice or experiences relevant to this type of renovation. Thank you so much!
Are you renting it out or flipping? If renting, I would think more cash flow would be likely with the two units.
Its very market and property specific. I sold a duplex converted from a SFH for a client, some years ago. The buyers converted it back to a SFH, lived in it for awhile then resold for a substantial increase in price. At that time and place the same sq ft SFH was bring a higher sale price than the same sq ft duplex. Good deal for the buyers.
In another case I looked at a SFH converted into 3 units, 2 of which were very small. It was a non-conforming use in a SF zoning. A buyer bought it and converted it back to a SFH, which had more demand in that area than a 3 unit conversion. Again profitable re-conversion for the buyer.
The point is that in some cases, going back to a SFH can be profitable, but not in all cases.
Not always the case. Often times in SFH conversions to apts, there is a common furnace and sometimes even common electric, and they almost always have common water, sewer and trash bills. Therefore the expenses are higher since all or most of the utilities are paid by the owner. Sure that results in higher rents to offset, but studies have shown that when the tenants pay for their own utilities there is 20% less usage.
I've bought many small apt buildings converted from SFH. One time I had an identical building that was SFH next door to a 2 unit converted from a SFH. Both were built by the same builder at the same time, and were identical when built. My SFH rented for $1,200 tenants paying all utilities, the next door building rented for $1,495, but the owner paid heat, hot water, cold water, sewer and trash. The heat/hot water bill alone was $3,500 a year, which alone put my SFH net higher than the identical 2 unit next door.
I ended up buying that 2 unit, and converting to individual heat and hot water for $6,500, saving $3,500 a year in fuel expenses.
Thanks for the posts. In the neighborhood, a SFH will be much more profitable. The house is dripping with charm but is not ideal as a duplex.
Have any of you encountered the staircase situation I describe? Hoping to speak with a contractor but wanted a sense of practicality before going into the discussion. (And may be why nobody else has jumped to restore this property.)
In general, without seeing your property, I would remove the exterior stairs, and remove the extra meter. When you are done you want it to look like it never was a two unit, so you want to remove any signs/hints that it was a 2 unit. IMHO
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing