In Practice
Price per unit, sometimes called price per door, is the purchase price divided by the number of apartments. A 20,000,000 dollar sale of a 200-unit community works out to 100,000 dollars per unit. Brokers, buyers and owners use it as a quick comparison, because it lets them line up properties of different sizes.
As a manager, you will hear it during sales, refinances and when a new owner takes over. It helps explain why a buyer is paying what they are paying and what the property must earn to justify it. A high price per unit usually means buyers expect strong rent growth or a renovation plan. A low one may signal older buildings, a weaker area or more work ahead.
An example: two communities sell in the same city. One has 100 units at 150,000 dollars per unit, the other has 100 units at 90,000 dollars per unit. Without looking at rents, condition and location, price per unit alone does not say which is the better deal.
A common mistake is relying on it alone. It ignores income, expenses and condition, so it cannot replace cap rate or a full analysis. Use it as one reference point, not a verdict.
How to calculate it
Price per unit = sale price divided by the number of units. Example only: 20,000,000 dollars divided by 200 units equals 100,000 dollars per unit.
Not to Be Confused With
Price per unit is what a buyer pays for each apartment. Revenue per unit is what each apartment earns.
Price per Unit: Common Questions
Is price per unit the same as price per door?
Yes. Door and unit mean the same thing in multifamily, one apartment.
Why is price per unit not enough to judge a deal?
It does not account for rents, expenses, condition or location. Cap rate and a full pro forma give a fuller picture.
