I know that the demand for two bedroom houses is very low, and many investors stay away from them as a rule of thumb. It seems that they would be in higher demand by tenants than they are by prospective buyers. What is the general feel of experienced landlords on two bedroom homes? Because the demand is so low for them by buyers, they can be had for dirt cheap in my area and would easily cash flow. My concern is vacancy issues if there is not a high demand by tenants.
Why don’t you call some property managers in the area? They will give you an idea about how fast they can rent these properties and for how much. Call some realtors as well, to find out about the demand for 2 BR homes.
You might be able to create opportunity from these “rules-of-thumb”.
I know that the demand for two bedroom houses is very low,
I don’t know where you came up with the idea that the demand for two bedroom houses is very low. I have a bunch of two bedroom houses and they do very well.
do some research on your area. this census website will give you the average number of bedrooms for both renters and home owners. You may find that there are a lot more 2 BR homes than you think.
I’m with Mike…I’ve had 2-bedroom rentals and they always stay rented. While the average family has 2.2 children yada yada, there are a lot of couples with no children, a lot of single/divorced folks that only need two bedroom places, etc.
Sorry for the confusion Mike, that is sort of what my question was. Most investors I know are not buy and hold investors, rather they buy, fix and sell or LO. They will not touch a two bedroom home. In my area you can get a two bedroom home for much less than a three bedroom home, and was wondering what the demand was from tenants.
Just skimming the craigslist ads it seems that a lot of renters are looking for two bedroom homes where as buyers are demanding 3+ with basement and garage, so 2beds looks like a pretty good option as a buy and hold strategy.
My 2 bedrooms usually go to single people who want a bedroom plus an office that can double as a guest room. Sometimes I get a single mother with 1-2 kids who can’t afford any more rent.
All the numbers for your 2 bedroom are going to be smaller. You buy it for less, you rent it for less, you sell it for less.
My 2 bedrooms are all old mobiles that I bought for the land under them. I’ll replace them with nice houses some day, but in the meantime they have been easy enough to keep rented.
I keep all my places in top condition, and the cheaper the rent, the harder it is for tenants to find a decent place in a nice neighborhood. So in my price range, the tenants want mine.
Lower income tenants are usually worse tenants, but the small percentage of good ones will take my nice little mobiles over something else in the same price range that isn’t so well maintained, or isn’t in such a nice neigborhood.