Lock-Off Units – More Profitable as One Large Rental or Two Smaller Units?

Question

Hey BP Community!

I’m buying an investment property with a lock-off unit, giving me the flexibility to rent it as either one large unit or two separate smaller units. I’ve seen some short-term rental investors take advantage of this setup by adjusting their listing based on seasonal demand, but I’m curious about real-world experiences.

For those of you who have lock-off properties, I’d love to hear:✅ Which strategy made you more money—renting it as one larger unit or as two smaller ones?✅ Which was more consistently booked? Did guests prefer a larger space, or did the smaller units stay occupied more often?✅ What challenges did you face managing it as two separate rentals? (Cleaning, turnover, guest confusion, etc.)✅ Did seasonality impact your strategy? Did you switch between configurations depending on demand?

I’m trying to determine if this kind of flexibility is worth the effort or if one approach is clearly better for cash flow and occupancy rates. Would love to hear your insights and numbers if you’re willing to share!

Looking forward to your responses—thanks in advance!

Here are a few details in case it matters for responders: Lakefront 1950's gem with docks at Lake of the Ozarks, season is March through September. Currently, upstairs has 3 bed/1 bath and downstairs lock off unit has 1 bed/1 bath.  Both have their own entrances and kitchens. When we purchase we'll add another 1/2 bath upstairs. There is one more 1 bed/1 bath with kitchen and private entrance on the lower level, as well, that I'll leave as a totally separate unit.

Tyler Divin · Answer

We had one in Helen, GA, with a 1/1 downstairs and a 3/2 upstairs.  When we bought it, it was doing $33k, and in our first full year, we did $80k.

As far as the upstairs vs downstairs, we did a parent/child listing and offered all three.  We set up the pricing to encourage longer bookings further out for the whole thing and then the upstairs 3/2.  The basement 1/1 with a hot tub stayed full and did well booking at the last minute so we kept prices higher there longer.  The previous owners left a lot of money on the table because they never offered it together, and those were some of the most valuable and longest bookings.

The main issue we encountered was noise transmitting through the floor.  We had a couple of inconsiderate guests upstairs and sensitive guests downstairs.  We minimized this by adding white noise machines, foam earplugs on the nightstands, and box fans in the closet.  In the listings, we made it very clear that you are NOT renting the whole place, and noise transmission was possible, both in the descriptions, messages, and photos. We asked guests to be considerate on that front.

We added pictures with a box and arrow pointing to the door so everyone was clear on what part they were renting, and we had cutout black metal signs made on Etsy that we put in the landscaped area with the name of the unit next to the entrance of each unit.  Overall, it worked out really well.  The units, rented separately, were always rented for a slight discount to comparable, freestanding properties, so I think most guests understood the value.

Laura Winters · Answer

Larger units always win. You get better customers, lower competition, don't need to worry about hotel expansions... Larger units are a lot more difficult and expensive to start, but a lot easier to manage once running. Smaller units might have a better income, but there are a lot of small added expenses.

Especially in the lake area, I will 100% go with a larger unit. Do you want to deal with addicts and partiers or a nice family or business group coming for a boat tour? The answer is simple.

Anja Schaer · Answer

Hey Katie, as an STR/MTR host & co-host in Metro Atlanta, I’d say it depends on your market and guest demand. In lakefront locations, larger rentals often attract families and groups, leading to higher ADRs and fewer turnovers. However, listing both separately and combined could maximize bookings—just ensure pricing justifies the extra cleaning and management work.

We don’t have direct experience with parent/child listings since we don’t currently manage a property set up for that, but I do know other hosts who use this strategy successfully. Again, it  really depends on the market. Check AirDNA, BNBcalc, and competitor listings to compare revenue potential. If managing two units doesn’t add at least 20% more net income, keeping it as one rental may be the better move. All the best with this strategy!!

Michael Baum · Answer

Hey @Katie Linder-Jesse, so I would be a fan of the larger unit, especially if it is a lakefront property.

You can create family friendly place that caters to them and the larger size will bring them in.

I would definitely look at AirBNB and VRBO and see what is out there in your area and what they bring in. What would be the length of stay? I am betting you will see a better return with the whole thing vs splitting them up.

Of course you can advertise them separately and offer both as a listing.

That can help bring in more stays, but if the smaller place is rented, then the larger place might not be large enough for a family.

Andrew Steffens · Answer

Congrats sounds like a cool place!

While I do not have experience with lockoffs I do have experience with larger properties that have options to rent together or separate and the answer is: it depends.

If it were a 2/1 with a 1/1 option I would use AirDNA to analyze a 2/1, 1/1, and a 3/2.  I would then check that research against current trend by using enemy method on AirBnb/VRBO sites.  That should give you a pretty good idea right there.  Generally speaking larger is better, but it is worth the research to be sure.  Also, there are advantages of going with 1 unit over 2.  It is half the work more or less.  Less guest inquiries, less actual guests to cater too, less turnover cleans.  Also if you are paying any software costs they usually charge by the listing, so half the cost. For me, I would need to see that running 2 separate units nets about 20% more to consider doing 2 separate over 1 large unit.

Good luck!

Katie Linder-Jesse · Answer

@Tyler Divin I like the idea of setting up the bookings further out with the whole unit and then saving the smaller units for last minute bookings if the whole home isn't rented. That makes a lot of sense. I have my other STR set up similarly with different requirements based on when the unit is booked.

As far as noise, it's been rented as 3 separate units for years but it's a good reminder if we are upgrading the property to have the descriptions be accurate.

Mike Grudzien · Answer

It will depend on the market, the typical traveler profile and the competition in the size categories.

Katie Linder-Jesse · Answer

@Andrew Steffens those are all really good insights. Less turnovers is always appealing! Do you ever use BNBcalc? I have used airdna but I'm switching over to BNBcalc.

Andrew Steffens · Answer

I believe I tried it in Beta, I have a premium account with AirDNA and have been using it forever.

Lock-Off Units – More Profitable as One Large Rental or Two Smaller Units?

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