What are your thoughts? Looking at buying an upper/lower duplex and need some input
Here's the situation:
I'm looking at possibly purchasing another investment property. It's an upper/lower duplex. It's a big place, about 2,000 square feet. The lower unit is a 2BR 1 Bath and the upper is a 1BR 1 Bath.
Here are some things I like about the property:
`It's old, but in good shape. The siding was updated a few years ago and overall, it seems like it has been relatively well cared for.
`The price is quite good and the taxes are low. My total mortgage with taxes and insurance would be about $450 or so.
'The gross rents are $1050/month, so clearing $600/month would be great.
'It can be converted back to a single family home with very little to no work if it needs to be.
Here are some things I DO NOT like about the property:
`It's a conversion from a single family home. My other duplex is a true side-by-side duplex with garages separating the two units, which is a very nice feature. Most duplexes in my area are single family conversions because all of our new construction seems to take place in the country. I live in a pretty rural area.
`There is only one furnace that heats both units. I believe the thermostat for said furnace is in the lower unit, meaning they control the heat. I am going to look at the lower unit this afternoon and will confirm my suspicions then. This setup seems weird to me. I would imagine the best way to deal with this would be to program the thermostat for specific heats and not allow the tenant to control it, but maybe you guys have some better ideas.
`The landlord pays for natural gas, water and sewer. The tenants are responsible for their own electric costs, however. I live in an area where our winters are stupidly cold. Heat can get pretty pricey here. I estimate it will cost me $100/month in natural gas charges and likely $50-60 in water/sewer charges so my $600/month just went to $450 pretty quickly.
What are your general thoughts? I think my biggest hangup is in paying the utilities and there only being one furnace. Have any of you experienced this type of situation?
Thanks!