Rental Comp Suggestions houses and condos vs apartment?

Question

I've been looking at padmapper/craigslist and local apartment communities, I'm wondering how much exactly a house would increase your rental revenue if everything else is the same. My market is a college town.

Property 1 - 2BR/2BA with garage Condo - Looking for 1100/mo vs. 2BR/2BA with car port - 1080/mo

Property 2 - 4BR/1.5BA house - Looking for 1500/mo
vs.
Apartment community - 3BR/1BA - 1100/mo
Apartment community - 2BR/1BA - 900/mo
Apartment community - 1BR/1BA - 720/mo
Individual rooms in shared houses - 400-500/mo

Brian Levredge · Answer

Where I invest, a home with the same bed/bath count as an apartment will rent for more provided they are in the same area. The notable exception is with new(er) construction apartments that have lots of amenities, but those tend to be in different areas as it is due to growth patterns and available raw land for development

There are of course other factors such as proximity to transportation, shopping, schools, etc., that can add or subtract from the rent.

Shane M · Answer

@Al Williamson Thanks for the feedback Al, don't worry about giving me too much info, I appreciate it! So you would advise against a condo but in this case the condo is the 2BR/2BA so it's kind of a balance between the extra risk you take on with a condo vs the extra benefit of keeping a tenant happier longer and possibly a lower turnover.

@Brian Levredge Thanks Brian, I'm interpreting what you are saying as rental for apartments are generally higher because of the higher turnover?

Throw a curve ball at you guys, another condo just came on the market 3BR, 3BA in a better area where rentals right next to the complex are going for:

1300 - 1BR, 1BA 1500 - 2BR,2BA

Think I could get 2000/mo for the 3BR, 3BA? Would a conservative estimate be priced at 1700?

Brian Levredge · Answer

I think you have to look a little beyond the immediate numbers you can get in rent for various housing units. Apartments will typically turn over more often than a SFD. That means higher vacancy and higher leasing/turnover related expenses in the long term as well. Houses also tend to offer more privacy than either a condo or apartment, which has a value as well.

Al Williamson · Answer

Oh the pros and cons. I'm thinking a condo is the last type of real estate to appreciate and the first type to drop in value. A SFH would offer you the ability to creatively rent space to students, families, short term visiting professors, etc. But that wasn't your question.

The condos open you up to the risk of special assessment and increasing monthly dues. It's difficult to make a snap shot decision in favor of condo because there are so many variables (common area amenities, age of roof, dry rot on siding, etc.).

I lean towards the 2Bd/2Ba. It likely to keep a long term tenant happy.

Rental Comp Suggestions houses and condos vs apartment?

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