Re: Duplex to Single - Posted by David Krulac
Posted by David Krulac on March 24, 2006 at 06:07:44:
I sold a 2 unit to a buyer that bought it for less than a SFH, and then converted it back to a SFH. It was a victorian house, it already had 2 baths, obviously, and there were no changes to the exterior. On the interior a door that was sealed was reopened.
Another property that I looked at was a 3 unit, that a buyer got for under market and re-converted back to a single family and did very well.
Several factors to consider:
a. the best conversions are the simplest ones where you change the property BACK to its original SFH use.
b. in the rapidly appreciating real estate market prices have risen faster than rents. making it advantegeous to convert a rental property into a SFH, probably owner occupied.
c. there are probably 20 times the buyers for a SFH than for a duplex. more buyers means you can get a higher price when you sell.
d. most people buy SFH based on sales comps NOT rental income. they are not buying based on the rental income possible but on the value and comps in the neighborhood.
e. this works best in the middle to upper price scales.
f. it can also work well in a neighborhood where the duplex/units are either a non-conforming grandfathered use or where almost all the neighboring properties are SFH.