Triplexes: scaling up Florida’s rental returns

Triplexes (three‑unit properties) occupy a niche between duplexes and larger multifamily buildings. For investors, adding one more unit can markedly increase cash flow while still qualifying for residential financing (up to four units). Florida’s population growth of over 8.5% between 2020 and 2024 ensures continued demand for rental housing across the state. Meanwhile, statewide fair‑market rents for 3‑bedroom units average about $2,112, and in high‑demand areas like Miami they exceed $3,000. In many markets, purchasing a triplex costs only modestly more than buying a duplex, yet the additional unit provides a buffer against vacancies and helps maintain a high debt‑service coverage ratio.

Triplex investors often rely on DSCR loans to finance properties because the qualification process emphasizes property cash flow rather than personal income. With three rent checks covering the mortgage, taxes, insurance and HOA fees, triplexes often achieve a DSCR above 1.2 or 1.3, even after accounting for vacancies. This can translate to easier loan approval and the ability to scale more quickly in Florida’s competitive market.

DSCR basics for triplexes

DSCR loans calculate a property’s eligibility by dividing gross rent by debt obligations. Suppose a triplex rents each of its three units for $1,800 per month (common in many Florida metros). Total monthly rent is $5,400. If the monthly mortgage, taxes, insurance and HOA total $4,000, the DSCR is 1.35. Because lenders typically look for a DSCR above 1.0 or 1.1, this property would qualify, and the borrower wouldn’t need to provide W‑2s or tax returns. Credit score and down‑payment requirements vary. Offermarket reports that most DSCR lenders require a credit score of at least 660 and an LTV ratio of 70–80%. Unconventional Lending notes that for 2–4 unit properties—including triplexes—a minimum down payment of 25% is typical and a minimum DSCR of 0.75 for purchases or 1.0 for refinances. However, borrowers with higher credit scores may secure better rates and lower down payments.

Why triplexes pair well with DSCR loans

Triplexes provide economies of scale that duplexes don’t. With three units, the impact of a single vacancy on DSCR is reduced to about one‑third rather than half. Because DSCR calculations are sensitive to gross income, maintaining high occupancy across three units helps keep the ratio above lender thresholds. Triplexes can also yield higher rental income per square foot; for example, a 3‑bedroom unit in Miami commands over $3,000 fair‑market rent, and in Orlando a similar unit averages around $2,486. Even if one unit is smaller or studio‑style, the aggregated rents often exceed the debt payment by a comfortable margin.

Another advantage is classification: properties with up to four units are still considered residential for financing purposes. This means investors can take advantage of DSCR loans that offer 30‑year amortization, interest‑only options and simplified underwriting, rather than the shorter terms and stricter underwriting typical of commercial loans. For triplex owners who plan to build portfolios, DSCR financing allows the property to be owned in an LLC, enabling asset protection and simplified bookkeeping. Many lenders allow investors to close in a business entity while personally guaranteeing the loan.

The Florida market: rent trends and regional nuances

Florida’s rental market exhibits sharp regional differences. Fair‑market rents (FMR) for three‑bedroom units range from around $2,163 in Jacksonville to over $3,297 in Fort Lauderdale. In Orlando, 3‑bedroom FMR stands at about $2,486, while Tampa’s FMR is similar. Because triplexes can be configured as 1‑bedroom, 2‑bedroom or 3‑bedroom units, investors should analyze local rent comps for each unit size. Overall, Florida rents remain above the national average: the state’s average rent of $1,752 is significantly higher than the U.S. fair‑market rent of about $1,671 for a two‑bedroom apartment. Meanwhile, median sale prices in Florida hover around $410,400, making triplex purchases more affordable than in coastal states like California. Investors seeking higher yields might look north to Jacksonville or west to Pensacola, where purchase prices are lower but rents remain solid.

Triplex investors should also consider local economic drivers. In Jacksonville, rents have been growing 4–6% annually because of steady job growth in logistics, financial services and healthcare. Miami, by contrast, sees strong demand from international tenants and short‑term rental guests, but purchase prices are higher. Tampa and Orlando draw families and tourists, making three‑bedroom units appealing to long‑term tenants. Regardless of location, Florida’s no‑income‑tax environment and pro‑landlord laws contribute to demand from both renters and investors.

Loan requirements and underwriting specifics for triplexes

Triplexes fall under 2–4 unit DSCR guidelines. Key criteria include:

DSCR threshold: Lenders typically require at least 1.1–1.5, though some accept ratios as low as 0.75.
Credit score: Minimum FICO around 660 is common, but some programs accept scores down to 550 for 25–30% down.
Down payment and LTV: Expect to put down 25% and to maintain an LTV not exceeding 75–80%. Higher down payments can reduce the interest rate.
Documentation: Provide a loan application, soft credit report, recent bank statements, purchase contract or proof of ownership and an appraisal. Landlord insurance is mandatory; wind‑mitigation and four‑point inspections are recommended.
Interest rates: Expect rates around 7.5–9.5%, with origination points and closing costs around 3–6%. Prepayment penalties may apply.
Borrower experience: Some lenders require evidence of landlord experience or at least a 12‑month housing payment history. First‑time investors can qualify but may face stricter terms.

Because triplexes involve multiple units, lenders examine not just aggregate rent but also each unit’s marketability. A property with one renovated unit and two outdated units may struggle to reach the desired DSCR. Ensure that each unit is rentable and meets local housing codes.

Investment strategies: maximizing triplex potential

Diversify unit sizes. Offering a mix of one‑bedroom, two‑bedroom and three‑bedroom units can attract a broader tenant base. For example, two‑bedroom units in Florida average about $1,601, while one‑bedroom units average $1,337. Combined rents can help maintain the DSCR if one unit experiences seasonal vacancy.
Plan for higher operating costs. Triplexes cost more to maintain than duplexes. Budget at least 20–25% of gross rent for taxes, insurance, maintenance and property management. Underestimating expenses is a common investor mistake.
Use professional management. Managing three separate tenants can be time‑consuming. A professional property manager can ensure consistent rent collection and address maintenance issues promptly, keeping DSCR ratios stable.
Explore value‑add opportunities. Minor renovations such as modernizing kitchens or adding in‑unit laundry can justify higher rents. The resulting DSCR improvement can also support a cash‑out refinance later.
Stress‑test DSCR. Run scenarios where one unit is vacant for one or two months. Ensure that the property still meets the minimum DSCR of 1.0. This protects against unexpected vacancies or tenant turnover.

Pros and cons of DSCR loans for triplexes

Pros

Leverage property cash flow. DSCR loans focus on rental income rather than personal income.
Scale quickly. With three units, positive cash flow can be significant, allowing investors to accumulate reserves for future acquisitions.
Flexible terms. Many lenders offer 30‑year fixed or interest‑only options, which maximize cash flow.
Entity‑friendly. Loans can close in a business entity, aiding asset protection and tax planning.

Cons

Higher capital requirement. A 25% down payment is standard, which may limit accessibility for new investors.
Higher interest rates and fees. Rates around 8–9% and fees of 3–6% can reduce cash flow.
Management intensity. More tenants mean more potential headaches, though this can be mitigated by hiring property management.

Case study: acquiring a Jacksonville triplex with a DSCR loan

Daniel identifies a triplex in Jacksonville priced at $450,000. Each unit is a two‑bedroom apartment; local FMR is about $1,730 per month. He estimates he can rent each for $1,850 after minor renovations, giving a total monthly rent of $5,550. With a 25% down payment ($112,500) and a 30‑year loan at 8% interest, Daniel’s monthly PITI is $4,200. His DSCR is 1.32, above the lender’s requirement of 1.1. He provides bank statements, an appraisal and evidence of his experience managing a duplex for over a year, satisfying the lender’s documentation requirements. Daniel closes in his LLC, with a personal guarantee, to protect his personal assets.

A year later, Daniel’s triplex remains fully occupied. Even after budgeting 10% for maintenance and property management, his annual cash flow is over $7,000. Because Jacksonville rents have been increasing 4–6% annually, he plans to raise rents slightly, improving his DSCR and positioning the property for a cash‑out refinance. His biggest lesson: always stress‑test the DSCR at slightly lower rents and higher expenses to ensure the property remains profitable during downturns.

Select Home Loans: a partner for triplex investors

Triplex investments demand a lender who understands Florida’s diverse submarkets. Select Home Loans offers DSCR programs tailored to 3‑unit properties and can handle closings for LLC‑owned triplexes. The firm’s Florida‑based team knows that Miami’s short‑term rental regulations differ from Jacksonville’s long‑term rental norms and can advise accordingly. With quick underwriting and dedicated loan officers, Select Home Loans helps triplex investors move fast in a competitive market. Investors can pre‑qualify based on estimated DSCR and receive guidance on structuring down payments and reserves.

Website: SelectHomeLoans.com
Phone: 888-550-3296

Conclusion

Triplexes offer a compelling balance between cash flow and manageability in Florida’s real‑estate market. DSCR loans allow investors to capitalize on this asset class without traditional income documentation, leveraging the strong rental demand and rising population. By understanding DSCR calculations, regional rent dynamics and lender requirements, investors can build resilient triplex portfolios. To explore DSCR financing options tailored to Florida triplexes, contact Select Home Loans. Their experienced advisors can evaluate your property’s potential, explain loan terms and guide you through a fast, Florida‑focused closing process.