A 3/2 with a detached apartment behind it?

Question

Hey all,

As I hunt for my first multiplex, I'm coming across 3/2 SFHs with either one or two apartments in a detached building behind it. I'm curious for anyone out with one of these setups. At first glance, it would seem like someone interested in a full size single family home isn't interested in having people live on the same property behind their house and it may prove harder to rent out than the apartments themselves. Or at least, that's my guess. Or am I wrong? I keep coming across a 3/2 SFH with a detached 2 car garage and a 2/1 above it.

The numbers work for me. But I'm concerned about rentability with the front/main house after I move out of it in a year.

Thanks again!

Aaron Montague · Answer

@Matthew Patton

I wouldn't worry about the rentability at all.  Arrangements like this are quickly becoming the norm as cities work to combat sprawl and increase density of housing.

Several of the BP podcast guests have remarked that many of their excellent deals were SFR on large lots where they could put another apartment behind the main building.

Kristyn Grimes · Answer

Hi Jamal,

Welcome to Houston! We're glad to have you!so there's hidden multi-family gems to be found all over the city but you really have to look because we really don't have neighborhoods of multifamily properties. At least not ones that you'd want to sink any of your money into. I would suggest to you to look in the area of Navigation and Canal boulevards, Montrose area, South Union/Brookhaven/South park neighborhoods.

Take 288 south, exit 610 east and exit Cullen. Turning right or left at light will blow your mind with the amount of growth. Currently, those neighborhoods are still up and coming. You'll see dilapidated, occupied homes sitting next to new build duplexes.

Gas up and take a drive! Let us know what you find. :)

Turner Wright · Answer

I'm from Houston and I know just what you mean--there are a lot of detached backyard apartments!!  I came across one today I fell in love with.  I can just taste the money!  But, really, if there are a lot of them there is a reason...because they rent out!  Trust me, you'll find someone to rent out the house and the apartment in Houston!

Matthew Patton · Answer

@Kristyn Grimes

Thank you so much for the in depth reply. All of this gives me more faith to move forward on these types of setups.

Kristyn Grimes · Answer

Hi Matthew,

Here in Houston those types of properties are very common. The single family home in front is usually occupied by young professional couples or a couple of roommates who all qualify for the rental terms (i.e.- three times the rent for each individual, not collectively). The garage apartments in the back are excellent for singles or students because they're smaller and usually a little bit less on the rent cost.

if you'd like to look up some examples of those setups here in Houston and you're using the BP insights or other data tools, look up zip code 77004, 77005, and 7700 6. There's other similar neighborhoods around Houston but those are the desirable areas for the detached garage apartment setups because the majority of the homes were built with bungalows in front and large detached garage buildings in the back between the 1930s and 50s and it's right near downtown.

Best of luck!

Anthony O. Porter · Answer

Depending on the location, location, location, it will rent.

Porter's Property LLC

Aaron K. · Answer

It will rent, maybe not for as much as an SFR on its own but may be very close.  Also depends how common those types of properties are, in my area there are some cities where 2 or 3 detached SFRs on a lot is very common.

Matthew Patton · Answer

It does! Thank you!

Elias Camhi · Answer

Hi @Matthew Patton, we mange many properties and many of those are exactly what you are describing.  If you look around the University of Houston main campus, just across I-45, you will find a plethora of these types of properties. Some are duplexes with added units in the back.  Some are quadplexes and more.  They are much older properties and as long as they are in good condition and appealing, they will rent.  It is funny in that some have converted their attics to additional rooms and they have the most awkward ceilings, but they still rent.

Hope this helps give some confidence.

Jamal Fontenot · Answer

@Kristyn Grimes YOU ARE AMAZING!!!!!!!! lol, I have recently moved to Houston and have been looking for the areas where the multifamily neighborhoods are. I literally spent all day yesterday googling "multifamily neighborhoods in Houston" as well as driving around.

A 3/2 with a detached apartment behind it?

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