Half Duplex - Should I buy or not

3 Replies

Guys I am planning to buy a half duplex for 140K. The house was built in the year 1980. It is in decent shape considering the year it was built. The last sale on it was for $100k in 2017. The rental income could in that range of $1100 per month. Is this a good one or should I pass. Please advise 

P.S - It is in a good school zone, a lot of amenities etc. 

Hi! Given the limited information, I would see what the current value of the property is? Even if this property last sold for $100k in 2017, can you find some more recent comparable sales in the neighborhood?

Will you be bank financing? If so, consider the downpayment requirement as well as cash to close.

Will it need to be renovated, this should also factor into your purchase price, knowing that you may have to sink money into renovations or repairs.

A good rule of thumb is trying to meet the 1% rule. Being that you are paying $140k for possibly  1100 in rent, you would sit below that 1% bench mark.

Hope this helps!

I looked at some recent sales in the neighborhood and found I’m paying $2-3 per sq foot. However it is very difficult to get close to the 1% bench mark in terms of rents vs actual property cost in this market.

Property cost: 140k

Bank finance: yes 

Down payment + closing cost + minor repair costs - $37000 

Expected rent: $1100

Property management fee: 10% 

Mortgage + insurance + property tax: $705

net: approx $200 - $250 per month 

What do you guys think ?

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