Houston, TX · Member since 2019 · 51 posts · 6 votes
Duplex landlords,
I'm in a situation where I bought a duplex and one side has been rehabbed. This is a class C property and the interest has been great on the rehabbed side. However, I am realizing I may have over rehabbed for the area. I'd like to scale down the rehab for the second unit and charge roughly $90 less in rent. The totals would be $650 currently rehabbed side and $560 for the other that still needs work.
My specific question for your duplex+ landlords is have you come across any instances where you have a 2 different charges for rents for leases signed at relatively the same time? Issues meaning have you had to deal with one tenant complaining and causing issues that their rent is $90 higher? How have you dealt with this?
Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
6y
@Mauricio Quintana
Valid question. I own 2 duplexes, and tenants at both locations pay different amounts. Yes, tenants do talk to each other, so you can probably guarantee they will at some point share what they pay in rent. Not much you can do about it, just focus on getting the place rented. When you do find a tenant, you can even explain to them when they sign the lease that you've discounted their rent by X dollars because it's not quite as finished as the other unit. Just drive that point home with them and that may help.
Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
6y
@Mauricio Quintana
Valid question. I own 2 duplexes, and tenants at both locations pay different amounts. Yes, tenants do talk to each other, so you can probably guarantee they will at some point share what they pay in rent. Not much you can do about it, just focus on getting the place rented. When you do find a tenant, you can even explain to them when they sign the lease that you've discounted their rent by X dollars because it's not quite as finished as the other unit. Just drive that point home with them and that may help.
Houston, TX · Member since 2019 · 51 posts · 6 votes
6y
@Account Closed
Thanks for the response and insight. This follow up may be a bit more specific, but hopefully you can shed some light. Have you been in a situation where you rehabbed one unit better than the other? If so, what rehabs did you do on the less expensive side to get the most bang for your buck? Example: i did new paint but cleaned carpet instead of replacing. I rehabbed kitchen but skipped bathroom and so on. I think you get my point.
Rental Property Investor · Canton, OH · Member since 2017 · 1k+ posts · 1k+ votes
6y
@Mauricio Quintana
I have not, but there has been a difference in square footage in one of them, which was why there was a rent differential. On my other duplex, they were both rehabbed the same, but 1 tenant actually pays $95 a month more. It's it's just the way the demand was at the time it was rented... and I'm certainly not going to discount it now.
Personally, if I was in your shoes, I would just try and get top dollar on both. If you find you're not getting any interest then perhaps drop the rate on the less rehabbed one.
This isn't any different than units in apartment buildings or townhouses where different units rent for different prices. Where I am $650 is still dirt cheap for rent.
Green Bay, WI · Member since 2017 · 30 posts · 21 votes
6y
I am in this same situation. I purchased a side by side with a detached garage. I renovated one side and leased it in a day at $775 to a quality tenant. I will be doing the other side eventually and plan to list it at $825. The side with the theoretically higher rent sits closer to the garage, and is on a different corner of the lot. That paired with the easy of how I rented the first side out is enough justification for me!
Think about a different situation though. What if you had a lease expire at a different time then the other and you raise to fair market rent before rerenting. Then one side would be paying more than the other just based on when the property was lease. I think this is probably more common than you would think.
@Mauricio Quintana get as much as you can for each unit. It may be wise to have a way to justify it to the tenants but bottom line is that circumstances change. Maybe market was different when one tenant moved in, maybe finishes are different, maybe one person needed to move more urgently. There could be a million reasons why rents are different on similar units. It may never be an issue. Have an answer ready if they ask, but consider it a non-issue until then.