i am looking at a four plex in my area . they are all 1bdrm units and the utilities are not seperated. does anyone own any 1 bdrm units? I was wondering what type of tenants these types of units attract. How hard do you think it would be to fully rent all 4 1 bdrm units. Also do you think the utilities not being seperated would cause a concern. Thanks
JohnnyG,
I have a bunch of 1 bedroom apartments. They are a little more difficult to rent than 2 or 3 bedroom units in my area, but not terrible. I would NOT buy a building that does not have the gas and electric separated. That is just asking for trouble. Even when they are paying the uitilites, I have tenants that keep the thermostat on 80 degrees all winter. If YOU pay their utilities, they will have the thermostat set on 80 and have the windows and doors open! NO THANKS!
Mike
mike
are 1 bdrm rentals more stable once you get a tenant in there. seems to me they would tend to stay longer. Also, how about the caliber of people looking for 1bdrm apt. seems to me that they would tend to be lower income and less responsible. just a thought.
Also, do all your properties have seperate utilities? would you pass on a deal if the utilities were not seperated? Thanks
Johnny,
Yes, I would pass on a deal if the gas and electric are not separate.
In my experience, tenants in 1 bedroom apartments are much less stable than families in 3 bedroom houses. The don’t stay as long and are more prone to problems. The exception is old and disabled tenants, who are generally good tenants. In this era, young singles are very prone to shacking up and getting pregnant, which means that they soon will be looking for a 2 bedroom apartment. The lower class is breeding at a phenomenal rate (partly because they recieve more government handouts as the number of kids increases). I don’t know who is going to pay for all these deadbeats in the future, but there will be plenty of demand for rentals. All these kids of the welfare generation will be renters also.
Mike
I dont like 1 bedrooms myself. I bought a 3 unit and turned it into a 2 because one of the units was a 1 bedroom and the separated utilities were only for a 2. I turned it into a nice big 4 bedroom unit and separate utilites alreadt were there for a 2 unit so the money I lost on having the 1 unit I gained by adding 1 more bedroom to the 3 bedroom and not having to pay 2 of their utilities because they were not separated. Be very vcareful with paying utilities. Tenants dont care about what you are paying for them.
fwiw I pass on all one bedroom per unit properties…properties without seperate utilities also…If you look on any MLS service the properties without seperate utilities are for the most part a large % of the listings…Tenants are the worst when it comes to being considerate…Sometimes the sellers claim to be on some type of a plan but I’d rather not be responsible for it…Always buy seperate utilities and at least 2 bedrooms per unit…
In my area, renters of 1BR’s are more transient. Renters of 2BR’s are much more stable.
Give you an example of one of them:
- Young male school teacher left six months after I took over, moved home with mom when his contract was not renewed.
- Next one, a young female librarian, moved after six months when she was promoted. and relocated to another library branch.
- Young police officer, live with mom and dad, needed the place as a hangout with friends, left when he was fired from the department. With me about a year.
- College grad, trainee with P&G, left after nine months to take an out of state promotion.
After the above, I decided to choose tenants with reasons to stay more than a year
- Head waitress, 50ish, divorced, worked in the neighborhood 20 years. I figured she’ll stay for a while, as she won’t be promoted, move in with a boyfriend, back to mom etc. Stayed six years till she had MS, quit her job, and went to live with a friend, babysitting for room and board.
- Student starting pharmacy school, parents paid the rent. With me thru two years of school, and first year on the job, three years total, then left after she got her second job.
- Doorman, starting over after divorce. Stayed six years till retirement, then left to live with a neice.
- Tenant in same building needing an extra unit to run a business. After two years. they went from writing software to something else, and got their stuff all over my lobby and hallway. Told them to leave because I don’t want commercial activity in a residential zone.
- Current tenant. Mother and daughter, referred by the local church, and church subsidizing half the rent. Mother, immigrant, not sure if legal, works cleaning offices, daughter is college student. With me over two years.
So, these are the type of tenants I got for this particular one BR.
And a word on utilities. I included utilities in the rent up till the doorman. When the software developer came in. told him to pay it himself as it was on a separate meter.
The doorman’s utilites came to $50/month. The software guy was there 24/7, A/C on day and night in the summer, computers on day and night, and his uitllities ran $450/month. I was charging him $750/month, below market.
Imagine if I got $750 rent, and paid $450.00 in utilities.
Reason why I included utilities in the rent is people move in and out often in the beginning, and I had to put the service in my name, back in the tenant’s name etc. , and some can’t qualify to put the service in theri own name.
Recently, told the mother daughter to put the ultility in their own name, and they were turned down. So we pay it, copy the bill, and then, submit and invoice to them for payment, which is how we did it the last two years. We get paid, but, it’s a pain.
I have the best one room rentals in the world.
SELF STORAGE WAREHOUSE!!!
NO HEAT
NO ELECTRICITY (SKY LIGHTS IN EACH UNIT)
NO PLUMBING
YOU NO PAY = I SELL YOUR STUFF
HAPPY, HAPPY, JOY JOY!!
I’ve heard what everyone has said and after completing my 1st investment I’ve learned from a few of my mistakes. I wish this post would’ve been seen by my eyes before purchasing my first rental. We all learn ny out mistakes :rolleyes
Now I have a 3 1-bedroom multi-family which has one furnace for the entire builing and the thermostat is located in the 1st floor apartment. I’m sure you all see where my problem lies. As the winter has lasted longer than I’ve liked gas bills are beginnig to eat at my profits.
What are some of your suggestions if any on what may be done to fix my situation? All criticism is welcomed. I feel its a good building other than this problem. Area is close to downtown, up an coming area, rents can be higher than they are and the note really isn’t that bad. I just know I’m going to dread winters when the heat becomes an issue. And no there is not A/C I have to worry about when it get hot outside. This heating/gas is my major problem.
please help seasoned investors!
Thanks
RE
Could you get the window ac units? Some of them come with heating also. I just don’t know what they are called. They usually cost more with the heating and I don’t know how effective they would be in your area.
I have a triplex as well and we provided 1 window unit per apt. and some people just carry their own.