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What Is a Fourplex and the Typical Size?

If you're considering a fourplex, you might wonder what it is and how big it typically is. A fourplex is a building with four separate living units, each with its own entrance. This setup is ideal for generating rental income because you can lease out all four units. To understand how large a fourplex might be, keep in mind that the size varies based on design and location. Generally, a fourplex will be bigger than smaller multi-family buildings like duplexes or triplexes. Knowing this can help you plan better and make informed decisions about construction or purchase.

What Is a Fourplex?

A fourplex, also called a quadplex, is a building with four separate living units. These units can be arranged in different ways, such as stacked on top of each other, side by side, or a mix of both. Fourplexes are common in many urban and suburban areas.

Each unit in a fourplex is designed to be a complete home, with its entrance, kitchen, and bathroom. There may be some shared spaces, like a common entryway. Fourplexes offer flexible designs to fit various preferences and lot sizes.

Ownership and Investment

Owning a fourplex can be a smart investment because it can generate rental income from four separate units, similar to having four individual rental properties. Owners might also get tax benefits and help with mortgage payments.

Size Considerations in Fourplex Properties

Fourplex buildings are usually on plots of land similar in size to those of single-family homes. This means each tenant gets a smaller portion of the total space. This can be a challenge if people are looking for long-term housing rather than just starter homes. In 2021, the average size for multi-family units, including fourplexes, was about 1,046 square feet. This is generally smaller than single-family homes, which often have more space.

Find out how many units and the max. building size you're allowed to have by your city.

The Cost of Constructing a Fourplex

Building a fourplex can vary in cost based on location, materials, and unit sizes. On average, it might cost between $190,000 and $648,000, with an average of around $419,000. In expensive areas, costs can go over $1 million, especially for projects aimed at large families or investment properties.

Estimating Fourplex Building Costs

A fourplex has four separate units in one building, with each unit ranging from 500 to over 1,200 square feet. Costs can increase because each unit needs its kitchen and bathroom, even though basic construction elements like foundations and walls are similar across different types of homes.

Determining the Cost per Unit

On average, building a single unit in a fourplex costs around $104,750, with prices ranging from $47,500 to $162,000 per unit. Costs vary based on location and the upgrades included in each unit.

Types of Fourplex Construction and Costs

Fourplexes usually come in two main designs: two-story buildings with units either stacked or side by side, and single-story buildings with units side by side.

Two-Story Fourplexes
For two-story fourplexes, construction costs range from $135 to $220 per square foot. These buildings typically have separate entrances and may include stairs to reach the upper units.

Single-Story Fourplexes
Single-story fourplexes cost between $95 and $180 per square foot. Although they use fewer materials, the need for a larger lot for single-story units can increase land costs.

Comparison Between Fourplexes and Townhouses

Fourplexes and townhouses have similar layouts, with separate living spaces connected by shared walls. Like fourplexes, townhouses usually include individual bathrooms, kitchens, and sometimes private yards. While townhouses typically have two units, configurations with more units are also common.

Distinguishing Features of Townhouses

The main difference between townhouses and other multi-unit buildings is ownership. In a townhouse, residents own their unit and often have ownership of their part of the yard. This ownership structure is similar to that of single-family homes, allowing for property modifications, although some restrictions may apply due to shared walls or HOA rules.

Pros and Cons of Townhouse Living

Living in a townhouse has benefits such as more autonomy than renting, with the freedom to make changes to the interior and sometimes the exterior of the unit. However, there are downsides like shared walls and limitations on modifications based on HOA regulations or property rules.

Key Considerations Before Investing in a Fourplex Property

Expenses

When buying a fourplex, you’ll need to manage several costs, such as property taxes, mortgage payments, insurance, and either property management fees or maintenance costs if you handle it yourself. Make sure to calculate your total expenses versus your rental income to ensure the property will be profitable and avoid any financial surprises.

Financial Analysis

Before investing, analyze the potential return on investment (ROI). Estimate how much rental income you expect and subtract your operating costs to find your net operating income. Calculate the property's cap rate by dividing this net income by the property's value. For properties with a mortgage, assess the cash-on-cash return to understand how profitable the investment is. Also, consider factors like property value increase, vacancy rates, and the quality of tenants, which can all be affected by the property's location.

Location

The success of your investment heavily depends on location. Focus on areas with high rental demand by researching the local market. Look for places with strong economies, good job prospects, and growing populations. You can find suitable fourplex properties on your own, with the help of a real estate agent, or through local real estate investor groups. Joining a network can also offer passive investment opportunities and connect you with property teams nationwide.

Utilities

Handling utility bills is an important part of managing a fourplex. Many investors install separate meters for each unit to keep track of usage. Studies show that when tenants pay their energy bills, they use less energy. Alternatively, landlords might split utility costs between units or use a billing company. Whatever method you choose, make sure your lease agreements clearly define who is responsible for utilities.