Why layout matters for your long term rental - getting quality tenants

[Alan Asriants]

In our area we often have Multi Family properties that have been converted from larger single family homes to Multi family homes at some point. These conversions were often done many decades ago. We also have "Built-as" Multifamily (mostly duplexes). These built as multi family properties were usually built after 1960 and have a basement, garages, central air, and a more modern layout. Some newer (1980+) even have an extra bathroom and a balcony as added amenities. 

Having bought BOTH "Built-as" and converted multi family, I can safely say that I will always prefer Built as MF. Besides utility issues with converted properties, these converted older homes tend to have layouts that just don't make sense, feel cramped, and in need of reframing to make them feel more "modern." Even after this type of work, this layout is just harder to work with. With what I had, I did the best I could and really improved the feel of the units.

All of my properties are equally renovated but I found out something very interesting when it came time to showing the units to potential tenants. I found that Built As MF were much easier to rent to higher quality tenants, and I could demand more in rent. 

For example, my Converted Multi Family 2 Bed unit has about 900sqft of living space, in unit washer/dryer, private deck, access to backyard, walk in closet, bedroom office suite, enormous granite kitchen island, 42 inch cabinets, and basement storage - rents for 1400/M. I had it up for $1475, and my current tenants negotiated it down. 

On the contrary, my Built As Multi Family 2 bed unit, has about 980sqft of living space, basement washer/dryer, balcony, no backyard, walk in closet, garage, basement storage, driveway parking - rents for $1700/M. I had it up for this amount and had multiple applicants to choose from. 

I quickly found out that layout is very important to people, and they would even sacrifice a certain location or some amenities in order to have a better "feel." People don't want to feel cramped. They don't want to do their laundry in the living room, or worse the kitchen. Modern layouts make more sense and attract better quality tenants. Quality tenants are looking for quality units. A strange layout and slanted ceilings can deter good tenants. 

Hope this helps!