For years, when agents asked me what my criteria was for buying investment property, one of my standard responses was that the property needed to be at least a 3 bed/ 2 bath. I know a lot of other investors in my area that have the same criteria. The thinking is you end up up narrowing your potential market to a very small segment that is willing to live in a 2 bed property.
By and large this is true … most people looking to rent or buy want a minimum of 3 bedrooms and a minimum of 2 bathrooms. Understandably, your average renter or homebuyer needs extra space for children, guests, an office, etc. A 2 bedroom typically doesn’t provide the space that your average consumer wants.
Why I Broke My Rule
So why did I break my own rule that I’ve held fast to for so many years?
Well, one reason is because inventory is tight and I’ve had to broaden my buying criteria (but that’s another topic for another day). The truth is, I’ve learned that buying real estate shouldn’t be about a strict formula applied to heterogeneous property types, neighborhoods, market factors, etc. There isn’t a “one-size-fits-all” formula for buying investment property because there is simply too much variation in the marketplace.
For instance, I’m sure there are people in New York City reading this article wondering what in the world is wrong with a 2 bed/ 1 bath property! This is because rental space in New York City is limited and therefore sold at a high premium. It’s not at all uncommon for someone to rent or own a 2 bed unit. However, in Atlanta, Georgia, most renters and buyers expect more square footage for the money.
So again, if the general sentiment in Atlanta is for more bedrooms …read more