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Answers (12)
- Nicholas Ribeiro, "NicholasRibeiro"
- Contributions:1807
Multi-unit is a great way to start! Nothing beats a tenant paying all your bills!
- Garrett Jay, MBA, CMA, "Garrett Jay"
- Contributions:3
There are lots of considerations when buying your first home AND your first investment property. In no particular order here are a few things to consider: 1. Living next to your tenant can be "Too close for comfort". It doesn't imply you should have an unlisted phone number and live 100 miles away, but living right next door usually leads to a lot more time spent with your tenant. 2. For any investment property, how many months of vacany can you afford (how much money in the bank/financial reserves do you have for vacancies and unexpected repairs)? 3. Make sure you include all of your monthly scheduled expenses when analyzing the financial returns for a property. Also, budget and put aside small percentage of your rent every month (2-5% depending on the age and condition of the property) for repairs and upgrades. I hope this helps. Best of Luck!
- Sandy Weed, Jr, "Sandy Weed Jr"
- Contributions:10
This is a great idea - read a property managment book first and see if this something you are willing to deal with. A Quad would be best b/c a vacancy wouldn't kill your cashflow. The good news is, if you improve the value of the property and can sell for a profit, the $ you make on the sale will be exempt from taxes if you have lived in one of the units as an owner-occupant (see a tax professional for complete details). You can then reinvest those profits into another multi unit - rinse and repeat.
- Janeece Smith, "klickitatcountyland"
- Contributions:27
Thats a great idea! Rent one side and live in the other... if an investment property can generate money and you can live there also to work your way to "owning" instead of renting, I say JUMP!!!!
- Estey Ryan Properties, "EsteyRyan"
- Contributions:5
If you feel confident in your ability to manage the property try going for a 3 or 4 unit building as opposed to a duplex. In a duplex you can probably charge the tenant the cost of your mortgage or close to it so that you essentially live for free. However, if you can get your hands on a 3 or 4 unit building, you can not only live for free but also have potential cash flow every month!
Another advantage to having more units is that if one unit is vacant for a period of time you will still have money coming in on the building; whereas, if it were only a duplex when you are in between tenants you will have no money coming in at all. It serves as a sort of insurance policy to ensure that you will always at least be covering your expenses.
If you don't feel comfortable with that just yet, then a duplex is definitely a good option. Maybe in the future you could work towards buildings with more units.
Best of luck!
Another advantage to having more units is that if one unit is vacant for a period of time you will still have money coming in on the building; whereas, if it were only a duplex when you are in between tenants you will have no money coming in at all. It serves as a sort of insurance policy to ensure that you will always at least be covering your expenses.
If you don't feel comfortable with that just yet, then a duplex is definitely a good option. Maybe in the future you could work towards buildings with more units.
Best of luck!
- Gordon Crawford, "Gordon Crawford"
- Contributions:15
Go for it!
A well located duplex can deliver a great return on your investment and as a new home owner it can be nice to have someone else helping you pay the mortgage. If you decide later that you don't like living that close to your tenants you can rent out your side and move on to your next investment.
Your timing is good with prices still a near historically low levels so your buying power is great now.
Good luck starting down the road to owning real estate and building your portfolio.
A well located duplex can deliver a great return on your investment and as a new home owner it can be nice to have someone else helping you pay the mortgage. If you decide later that you don't like living that close to your tenants you can rent out your side and move on to your next investment.
Your timing is good with prices still a near historically low levels so your buying power is great now.
Good luck starting down the road to owning real estate and building your portfolio.
- Ofe Polack, "Ofe Polack"
- Contributions:1416
If you are a first time buyer, I would say, try being a landlord first and see how well you handle regular maintenance first. Some buyers are blinded by the possibilities of an added income, and neglect to understand the responsibilities associated with owning a property, in this case two properties. Think about it, and don't rush into anything. Good luck in whatever you do!!!
- Pauline Charlton, "pauline charlton 1"
- Contributions:3
Theoretically, it is a good thing to have rental income and living in one side and renting the other is a tried a true step to building a real estate portfolio
However, you need to decide whether you want your tenant in your back yard.
If you are o.k. with such an arrangement, the income from the rented section will certainly provide some offset of the expenses for the one you live in. In addition, when you move later on you can find another tenant and have both sides rented.
It all depends on your preferences.
However, you need to decide whether you want your tenant in your back yard.
If you are o.k. with such an arrangement, the income from the rented section will certainly provide some offset of the expenses for the one you live in. In addition, when you move later on you can find another tenant and have both sides rented.
It all depends on your preferences.
- Sharon Lewis, "Sharon Lewis"
- Contributions:3916
Depends on the duplex,what kind of shape its in, how much money or sweat equity you are willing to invest, how much work you are willing to take on after a long day at work. Also ask yourself,how do you feel about your tenants knocking on your door whenever something breaks. I would get that worked out in advance, methods of communication. Good for you for going down this road.
- sunnyview
- Contributions:25127
The right duplex is a great way to start your ownership path as long as you are willing to manage the other side yourself if need be. You can choose your neighbors, build equity faster and often reduce your living expenses while living in your own property.
Make sure the property will pencil out with or without you living in it and I think it's a great way to go.
Make sure the property will pencil out with or without you living in it and I think it's a great way to go.
- Real Estate Investments, "Marco Santarelli"
- Contributions:264
It's a good idea if you're living where you want to live. From an investment perspective, make sure the numbers will make sense the day you buy it. In many cases it makes more sense to live (own or rent) where your family wants to live, and invest in markets where you get the highest returns in terms of cash flow and equity growth. (See the related article on our website.)
Good luck!
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Good luck!
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- Nathan Tutas, "Nathan Tutas"
- Contributions:61
The answer to this question depends on many variables. But in general I think that's probably a good idea. You can keep the whole thing close at hand and the rent from the other unit may very well cover your mortgage payment. If you have the funds and credit to do it I would say go for it. Good luck.
Nathan
Nathan
As a first time home buyer, as well as real estate investor should my first purchase be a duplex?
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