Real Estate

Buying a multi-unit property can be like sharing an entrée at a restaurant, buying a two-for-one special at the grocery store, or eating leftovers. You can pay about the same price, and often less, for a multi-dwelling property as you might for a single-family residence with the benefit of added income to help pay the mortgage or have extra space for guests or relatives. These additional dwelling spaces can be an accessory apartment attached to a primary residence or over a garage, a classic two-family house of similar sized living areas, or one parcel with two or more separate houses.

Median prices for multi-unit homes are often less than single family homes

Real estate agents generally agree that multiple units sell for less than similarly sized single-family homes. This hypothesis was tested by analyzing data for all residential sales in Dutchess County from January to September of this year using official Dutchess County sales data. Around 200 to 250 single-family homes closed every month in the county. The median price of these single-family residences was consistently between $350,000 and $400,000 each month, climbing to $425,000 in July and August on higher unit sales. Purchase prices varied enormously from below $100,000 to $2,000,000.  

In contrast, unit sales of two-, three-, and four-family properties were much less common, averaging only around 15 to 20 monthly. Most, but not all, of these houses were in cities like Wappingers Falls, Poughkeepsie, and Beacon. The median price of these properties was often lower than that of single-family residences. Most recently, the September median for a multi-family property in all of Dutchess County was $360,000 compared to $414,000 for a median priced single-family home. Unlike single-family homes, the price range for multi-unit homes is much narrower with the most expensive listings generally closing at only slightly more than the median price point. 

Similar trends in Litchfield County and Columbia County

During this same period in Litchfield County, using data from CTMLS, about 14 two- and three-family homes were sold every month at a median price of $246,000, in contrast to the county-wide median of $328,000. Like Dutchess County, activity in Litchfield County was centered in urban areas, with Torrington alone accounting for 72% of all multi-family unit sales. In Main Street’s circulation area of northwestern Litchfield, only one multi-family was sold in Sharon Valley during this nine-month period. Likewise in Columbia County, multi-family properties sold were centered in the City of Hudson but could also be found in rural hamlets.

Two-family homes can help pay the mortgage

In the first nine months of the year, only eleven multi-family homes in rural northeastern Dutchess County were recorded – about one a month. Each seems like an attractive purchase and provides insight into the economics of multi-family home ownership. Of the eleven homes, two had an accessory apartment. The purchaser of the ranch house on 384 Poplar Hill Road in Amenia, in addition to an accessory unit, acquired views, a silo, and barns on almost seven acres for $365,000. With an estimated monthly rent of $1,000 on a one-bedroom accessory apartment, 50% of the monthly mortgage payments would be covered even at today’s interest rates. Similarly, a classic two-family house with four bedrooms on one acre at 399 Sinpatch Road in Wassaic, sold for $260,000. 

Two buildings each with two apartments at 764 Old Route 22 plus a vacant adjoining lot in Amenia sold for $600,000 recently. Although this was the most expensive multi-family property in our region during the period, the extra unit produce an estimated $4,500 a month in rent, which could cover the mortgage payment and property taxes and offer a free apartment for the owner. 

The only multi-family sold in northwestern Litchfield County in the last nine months was at 155 Sharon Valley Road – a spacious two-family 2,816 square foot property which sold quickly in March for $330,000. Consider that this is only 53% of the $620,000 median sale price of a house in Sharon in March according to CT MLS.

Two houses for the price of one sold in Ancramdale, NY, for $219,000 to architect Doug Larsen and his wife Victoria. They renovated the 1850 house in the center of the hamlet as an office and simply rented the house next door.

Nobody likes landlords

No child ever says that when they grow up, they’d like to be a landlord. Having a tenant living in close proximity may help cover the mortgage, but it’s not for everyone. Traditionally this has been a mom-and-pop business – a way for people to build capital and move up the economic food chain. Today it sometimes makes financial sense to convert two-family units into one-family homes. Often multi-unit houses have condition issues, deferred maintenance, and problematic locations. Renovation and repairs on rented units are always an unknown cost, and tenants can be unreliable. If you live in part of the multi-family you may sacrifice privacy and, although rental income can be tax sheltered, filing your income taxes will be more complicated. Local and state rent regulations, zoning, and fair housing laws should be taken into consideration. 

Depending on location and the real estate market, it may be more difficult to sell or rent a multi-family. Nonetheless, as Janet Myer, an experienced agent with Houlihan & Lawrence, observed, “Rental income on a multi-family can multiply your income and compound your returns quickly. In the past three years, I have found people under forty are the most interested in buying multi-family units, which are much more challenging to find now.”

What’s available for sale in our area

At the time this article was written, only eight multi-family residences were for sale in northeastern Dutchess County, ranging from a 8,000-square-foot historic home on Salt Pike Turnpike in Clinton Corners in need of renovation for $895,000 to a former parsonage by the traffic in Amenia for $289,000. Multi-family homes in Columbia County are most common in Hudson but can also be found in county hamlets like Ancramdale, where a three-unit 4,000-square-foot historic house with a swimming pool is listed at $499,500. The owners, Kristina Albaugh and Josh Ingmire of 100 Mile, purchased it at the end of 2021 for $477,000 but are now relocating to Chicago. Albaugh explained, “Yes we have loved living in the Ancramdale house for the past few years. It’s especially idyllic during the holiday season! So cosy! We’ve enjoyed many big family dinners and can now have our families visit from out of state since the house is large enough to accommodate everyone easily. My mom would like to move into the apartment that is attached!”

In all of Litchfield County, there were only 23 two- and three-family homes actively listed and only four in our immediate area including two in Kent. The two-family home built in 1900 at 47 Maple Extension is listed at $375,000. Dave Fairty, the listing agent, commented, “Multi-family homes are a great purchase for young families and first-time home buyers. The additional rental income can offset up to 50% or more of a mortgage payment.”

In order to find attractive multi-family houses search realtor.com, search by county and filter for multi-family properties. Select a real estate broker who is knowledgeable about investing in real estate to help you evaluate properties. Multi-family homes, although few in number, can provide an affordable housing alternative for buyers, often young families and first-time home buyers, who can accept the responsibility of being a landlord. •

Christine Bates is a registered real-estate agent in New York and Connecticut with William Pitt Sotheby’s. She has written about real estate and business since Main Street Magazine’s first issue in 2013.