Fourplex with one bedroom units..... Good or bad??

Question

hi there. I have asked this question within my local area market forum and was wanted to branch out further to see what other investors say about it.

I'm looking at getting a fourplex, made up of one bedroom apartments, in a B type of area. My only expertise thus far is with 3 bedroom SFH's and was wondering if you have had a difficult time keeping these occupied? I have never had a tough time finding tenants for the 3 bedroom houses, and I don't want to have a high vacancy rate for obvious reasons. I really want to get into multifamily and this location is nice along with some good seller financing.

Thanks for your input!!

Kyle Godbout · Answer

If I don pass @Don Meinke I will definitely let you know!

Kyle Godbout · Answer

I think I will go for them if I can get them for a good deal. I want to get into multi families and this would be good experience! Plus, they are right next to my newest SFH rental.

Johann Jells · Answer

I love my one bedrooms. The tenants are definitely easier on the apartments than families.  Only downside is you have more infrastructure like sinks, heat & appliances per rent dollar.

Rodney Glover · Answer

Run Forrest Run...unless you like dealing with transits and college students...

Don Meinke · Answer

Kyle,

If you decide to pass on these,,,I would take a look at them for myself,,if you dont mind???

Gino Barbaro · Answer

@Kyle Godbout

Hi Kyle

We have a 36 unit that is all one bed, no problem with vacancy.  We are pretty close to a university.  One beds tend to be more transient, but if you have a high millennial population or senior citizen, this will help with renting them out.  Do some research in your market with # of households, the size of households is important.  Larger households tend to purchase homes, and vice versa.  Go on www.bls.gov and also the census website.  You can also google the city name and pull up demographics.

Look at the rent history on the property also, and check the current leases

Good Luck

Gino

Kyle Godbout · Answer

thanks @Matt Morgan

These are pretty close to the lumber district. I'm wanting to rent for $600 or so. I think these can give people a chance to live near that new area without paying their prices. I imagine those will be pricey. I'm just nervous with one bedroom units since I have no experience with them. I think I will try it if I can buy them right though!

Matt Morgan · Answer

@Kyle Godbout, Millard doesn't seem like a prime area for 1 bedroom apts, but I don't have any direct experience with that part of town either.  However, they are building new apartments along with retail and restaurants to the lumber district area, so not sure how close you are to that, but that could be tough competition in another year when they're complete.  I think if you're priced right (550 to 700), you shouldn't have any problems with vacancies.  Good luck!

Don Meinke · Answer

I actually prefer one bedrooms.  IF they have kids most of the time a very small infant etc.  I think of kids as damage potential.  Infants dont color on walls,,,wreck things,,,cause noise.  Try catering to the vast renter pool of mid to late stage of life after families are gone and they are living alone.  those dont turn over quickly if you have a great condition,,,modern decor and amenities,,,they dont complain much either.  give them some upscale stuff like wood floors and granite rem or quartz countertop,decent appliances and your good to go.  They like to see ceramic tile in shower area too.  IF your locked into a too small bathroom your updating you can take out a tub and make a fabulous walk in shower.  the more handicap accesable they are the better.  Older people have illnesses and surgeries where a walker or wheel chair is needed temp or permanent.  IF remodeling anyway make doorways open and wide

I would PREFER 1 bedrooms,,,I would be all over them.

Ashley Schroeder · Answer

Think of the types of people who will rent it.  There are plenty of single newly out of school, starting college, starting the workforce, etc. that need a place to live!  Many of them are just looking for 1 bedrooms.  Now look at your location according to the type of tenants you would expect to be renting to... would they want to live in that location?  I think that would help you answer your question on how well these can be rented.  Also ask the current owner about their occupancy rates as well as verification.  Good luck!