How does this logic look for breaking a lease early to buy a Duplex with the intent of renting out one side:
6 months left on the lease; $1500 to break it; $1200/mo for rent+util
Mortgage on Duplex = $1400; rent 1 side for $900; Mortgage-rent+util($200/mo) = $700/mo out-of-pocket.
I would save $500/mo ($1200-$700), which would pay for the lease-break in 3 months.
Suppose it takes as along as 2 months and $2,000 to repair/improve the unit and find a renter - that's an 11-mo break-even point (because I paid the full mortgage 2 months), which is 11 months of building equity as well.
OR - should I just not break the lease and wait 6 months? Basically what I am trying to figure out how to do here is determine if I can create value in 6 months greater than $1500, in which case I should break the lease.
I suppose it depends on how good of a deal I find, huh. - Just curious what other's thoughts are.
Can you sublease the current place? I'm guessing with an official Lease Braking fee, the answer is no. But you might be able to, check your lease.
Your math looks solid. When you say "mortgage" do you mean PITI?
Bear in mind you also now have a sewer and water bill to pay. That could affect your math by a couple hundred bucks each month.
I applaud your choice to pick up a duplex and house hack a bit. Anything extra can be put towards valuable investments.
Happy House Hacking!!
Unfortunately I can't sublet it.
It was also recommended to me today by a mortgage loan officer NOT to use FHA, in which case I would need 15% down for a multi-family, which I don't have. He advised against FHA because you are stuck with the mortgage insurance for the life of the loan (unless you refinance, which would incur closing costs).
Any creative ideas to get over the 15% down obstacle?
And thanks for responding to my post!
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