How to use price per unit when comparing apartment buildings
Price per unit is the purchase price divided by the number of units. A $1,080,000 building with 12 units is $90,000 a unit. It is a quick way to line up buildings of different sizes, but it ignores rent, condition and expenses, so use it to screen buildings and then compare income per unit before you decide.
The price per unit formula
Divide the price by the number of units. Count every unit that can be rented, including a manager's unit or an unfinished one, but note it, because a unit you cannot rent is not like the others.
Example a made-up 12-unit building is listed at $1,080,000. $1,080,000 divided by 12 is $90,000 per unit. A made-up 10-unit building down the road sold for $950,000, which is $95,000 per unit.
On this number alone the first building looks cheaper. That is only the start of the comparison.
What price per unit hides
- Unit size. A building of studios and a building of three-bedrooms can have the same price per unit and very different rent.
- Rent. Two buildings at the same price per unit can bring in different income.
- Expenses. Heat paid by the owner, old plumbing or high property taxes lower income without changing the price per unit.
- Condition. A low price per unit may be a building that needs work, which is a cost you pay after closing.
Compare income per unit too
Add one more column: net operating income per unit. Build NOI from the seller's rent roll and T12 (see how to calculate NOI) and divide by the unit count.
| Building A | Building B | |
|---|---|---|
| Units | 12 | 10 |
| Price | $1,080,000 | $950,000 |
| Price per unit | $90,000 | $95,000 |
| NOI | $72,000 | $52,000 |
| NOI per unit | $6,000 | $5,200 |
| Cap rate (NOI divided by price) | about 6.7% | about 5.5% |
All figures are made up. Building B costs more per unit and earns less per unit, so it is the weaker buy on these numbers, even though its total price is lower. Cap rate shows the same thing in one figure; see cap rate from your own books.
Price per unit versus gross rent multiplier
The gross rent multiplier divides price by yearly rent and so captures rent differences that price per unit misses. It still ignores expenses. Use price per unit to build a list, GRM to narrow it, and NOI and cap rate to decide.
A caution on market comparisons
Sales you find for similar buildings tell you what others paid, not what a building is worth to you. Check that the buildings are the same age, size and condition, and that the sale prices are real closed prices. This post gives no typical price per unit for any market, because it varies by city, year and building type.
A short checklist before you compare buildings
- Same unit count basis: do both counts include manager and storage units?
- Same time frame: are both prices closed sales or only asking prices?
- Same kind of building: age, unit mix, parking and who pays utilities.
- Same expense basis: use your own estimate of taxes and insurance, not the seller's.
- Condition: price the work each building needs.
Price per unit is helpful because it forces a fair comparison across sizes, and it is easy to calculate while you browse listings. Its weakness is that it treats every unit as equal. A useful habit is to write both numbers next to each other for every building you look at, price per unit and NOI per unit, and to drop any building where the first looks good and the second does not. Keep the list in one place so you can see patterns. Over time, you will learn which buildings in your area price high or low per unit, and why, from the comparisons you made yourself.
How DoorKeeping fits
Once you own a building, DoorKeeping keeps its rent roll and T12, so income per unit is a question to Claude or ChatGPT instead of a spreadsheet. It does not value property or suggest rents. It costs $2 per unit per month.
Sources
- IRS, Publication 527, Residential Rental Property, read Oct 31, 2026
- CFPB, What is a loan-to-value ratio?, read Oct 31, 2026
Questions
- What is a good price per unit for an apartment building?
- It depends on the market, the building's age and its rents, so there is no single good number. Compare it with income per unit.
- Should I count a vacant unit in price per unit?
- Yes, if it can be rented. Note it in your comparison so the building is judged fairly.
- Is price per unit the same as cap rate?
- No. Price per unit ignores income. Cap rate is NOI divided by price.