Suite mix

[brentmatheson]

I`ve heard from several people that it is ideal to have a building with at least 50-67% of the units having 2 bedrooms. What are the downsides to having a building that only has 1 bedroom units? Is it an issue when selling the building? Does it attract an undesirable group of people (ie. no families)? It seems that this type of building would cashflow just as good as any other building.

Brent

 

[DennisEpp]

The people you have heard from are absolutely right. Resale is more difficult and narrows down the amount of potential tenants who will be applying. Buying a property will 2 bedrooms is in all ways more efficient and I would include the Cash Flow potential in this also..

regards

Dennis Epp

 

[Jkaufman]

I am also a realtor and agree with Dennis` comments. A little further clarification. Historically one bedrooms have been considerably harder to market on resale. There has been some change in Calgary as to the perception of one bedrooms and this is mostly due to affordabilty. Two bedroom units are easier to sell and often easier to rent as the economics tend to play a factor for most tenants/buyers ie:two bedrooms don`t typically cost twice what a one bedroom does. I hope this expains it well enough.
regards
Jamie

 

[markl]

Personally my biggest thing about bachelor and 1 bedroom units is the turnover. You will spend more time re-renting the units where as 2 - 3 bedroom unit tenents stay longer and are more settled.

Just my $.02

Regards,

 

[RebeccaBryan]

One more thing, when the building has 2 bedrooms suites, two people can share the suite and split the rent and that makes renting two bedrooms much easier than a 1 bedroom.

 

[Thomas Beyer]

Of course, 2BRs are preferred !!

2BRs have the following benefits

a ) higher rent .. about $130-$250/month
b ) less turnover, thus lowr vacancy and less R&M cost
c ) easier to sell as condos if this is the option one wishes to take
d ) easier to sell as a building down the road

BUT:

they are usually much more expensive per unit !!!

So the question is REALLY: if I had a certain $ amount, say $500,000 .. shall I buy a 20 suiter for $100,000/door with 20 1BRs for $2.0M or should I buy a 12 suiter for $160,000/door ? Then the answer is not so easy !!

In hindsight, I bought too many buildings with bachelors or 1BRs .. but I have done alright .. and likely have bought more / bigger buildings with that same cash.

 

[gwasser]

Hi Thomas Beyer,


I don`t know whether others have already done so, but I would like to express my thanks for all your very informative and valuable contributions on this forum. When active on a site like this, you may sometimes ask yourself whether you`re overdoing it. I want to make sure that you know that this is not the case with your posts. I for one think they are extremely valuable.