Price Per Unit Calculator
Price per unit, also called price per door, is how multifamily buyers compare buildings of different sizes. Enter the price, unit count and square footage, plus what similar buildings have sold for per unit, to see how the asking price stacks up.
Price comparison
Worked example
A 16-unit building is listed at $1,850,000. That works out to $115,625 per unit. The building has 13,600 rentable square feet, or $136.03 per square foot, with an average unit size of 850 square feet.
Similar buildings in the area have recently sold for about $125,000 per unit. At that price the building would be worth $2,000,000, so the asking price is $150,000 below market.
Before you get excited, find out why. A lower price per unit can reflect smaller units, deferred maintenance, below-market rents or a weaker block.
What price per unit measures
Price per unit is the purchase price divided by the number of rentable units. It lets you compare a 6-unit building with a 40-unit building on the same scale, much like price per square foot does for houses. Brokers, appraisers and lenders all quote multifamily sales this way, so it is the fastest way to tell whether an asking price is in line with the market.
It is a cost measure, not a return measure. It says nothing about how much income each unit produces, which is why you should always pair it with the cap rate and gross rent multiplier.
Price per unit versus price per square foot
Price per unit treats a studio and a three-bedroom the same. If a building has mostly large units, its price per unit will look high even when its price per square foot is reasonable. If it has mostly small units, the opposite happens. Checking both numbers, along with the average unit size, keeps you from being fooled by the unit mix.
Use rentable square footage inside the units, not the gross building area that includes hallways and stairwells, and make sure your comparable sales are measured the same way.
Finding good comparables
The comparison is only as good as the sales you compare against. Look for buildings that match on:
- Location: the same neighborhood or submarket, not just the same city
- Age and condition: renovated buildings sell for much more per unit than tired ones
- Size and unit mix: similar unit counts and bedroom counts
- Timing: sales from the last 6 to 12 months, since prices move with interest rates
- Who pays utilities: owner-paid heat or water lowers the price buyers will pay
Commercial brokers, appraisers, county sale records and paid data services are the usual sources. Ask a broker for a sales comparable report on any building you are serious about.
When price per unit misleads
A building with rents well below market can have a low price per unit and still be a good buy, because you can raise rents over time. A building with rents above market can look cheap per unit but be priced fully on income it may not keep. That is why price per unit should be the start of the analysis, not the end.
Next, rebuild the income and expenses in the NOI calculator and check NOI per unit. Two buildings at $115,000 per unit with NOI of $6,000 and $8,000 per unit are very different investments.
Price per unit and replacement cost
Experienced buyers also compare price per unit with what it would cost to build a similar unit today, including land. When older buildings sell well below replacement cost, new construction is hard to justify, which limits new competition and supports rents over time. When prices approach or exceed replacement cost, developers can add supply nearby. Local builders and appraisers can give you a rough construction cost per unit for your area.
Frequently asked questions
How do you calculate price per unit?
Divide the purchase price by the number of units. A $1,850,000 building with 16 units costs $115,625 per unit.
What is a good price per unit for an apartment building?
It depends entirely on the market, age and unit size. The right benchmark is recent sales of similar buildings nearby, not a national number.
Is price per unit the same as price per door?
Yes. Investors use the two terms interchangeably to mean the price divided by the number of rentable units.
Should I use price per unit or price per square foot?
Use both. Price per unit is the standard for multifamily comparisons, and price per square foot corrects for buildings with unusually large or small units.
Does price per unit tell me if a building is a good investment?
No. It only measures cost. Check the cap rate, NOI per unit and cash flow to judge the return.
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Results are estimates for education only, not financial, tax or legal advice. Check numbers with your lender and advisors before you buy.