Had settlement today; got an interesting idea… - Posted by David
Posted by David on March 03, 2000 at 17:36:32:
Sold today a 2 story victorian house over 100 years old and about 1850 sq.ft. It had been divided into more or less 2 units quite a long time ago probably at least 30-40 years ago. Various owners have upgraded the 2 unit situation, as there was separeate electricity, water and sewer service; but only one furnace.
First, new idea was that the last owner had rented the first floor as a 2 bedroom apartment for $425, and rented the second floor as 3 sleeping rooms with shared bath and kitchen, among themselves, not with the first floor. Rent $200 a room, for total of $1,025. Presumably the second floor would rent for the same as the first if as one apartment. So the last owner increased the rent by essentially further subdividing the 2nd floor into 3 sleeping room units.
Secondly, the buyer are going to make it back into 1 single unit first and second floor together. They’re going to live there in the whole house. I hadn’t thought of that use but its a great one.
Multi-unit prices are down since the tax law changes in 1986, such that if this was one unit it would have sold for 10 to 20% more than it did as a two unit. There are always more buyers for SFH than 2 units probably 10 to 20 times the buyer pool. More buyers equals more demand and higher prices. There has to be plenty more of properties that formerly were SFH, converted to 2 or 3 units that can be re-converted back to SFH. Great idea these buyers came up with, I can’t take credit, but I’ll keep it in mind for another day, another deal.