New duplex vrs 1 year old duplex (same design)

7 Replies

Hey everyone looking for your opinions on my situation, would love advice anyone can give! So I’m looking at two duplexes right now. It’s a new subdivision and they are cookie cutter builds. I’m looking to purchase one of the duplexes and house hack it. Currently there are plenty of new homes never used ready to be purchased and rented out, but also there is 1 duplex that is already being sold by the owner 1 year after purchase for $5k less than the new homes in the same neighborhood. I’m considering the new home because it would come with a 1 year contractors warranty and will be completely unused. Where as the 1 year old home does not come with its 1 year contractors warranty and is used. My first instinct is to try and get the owner of the used home to come down in price $15k-$20k since it’s 1 year old and why would I buy a used house for only $5k less than what I would pay for the exact same home brand new. (Hope I didn’t confuse everyone with this). Note: both homes are identical in every way since they’re cookie cutters. Both will come with 1 side rented out. Has anyone been in this situation before? If so what did you do? And if not, what would you do in my position? Thanks everyone! -Jacob

Personally, I'd look at what would be needed to make it "new" again. If the paint, flooring, etc are perfect then I wouldn't care about it being just one year older. Also do the new places come with appliances? What about lived in one?

I personally would go with the brand new one if the seller of the 1 year old duplex is not willing to come down $15k. If they did come down, then I’d probably go with the lower price duplex. But when it comes to buying, isnt it all about the numbers. Is the tenant in the new unit going to pay more than the one in the older unit?

Have you tried using the Bigger Pockets calculator to run the numbers to see what the difference can potentially be and how much lower in price you would beed to older unit to be in order to make a difference?

1 year old is new. Why would you need a warranty on a 1 yr old home if it’s built well. I’d prefer to buy the older home! At least you can see how things have aged over the first year. FWIW, my duplexes are between 100 and 130 years old.

@Jacob Gallup

Not exactly an answer to your question, but the "Currently there are plenty of new homes never used ready to be purchased and rented out", combined with the fact that an existing owner is selling one of these after just one year got me thinking whether this is a good area to own rentals at all?

If there overabundance of new housing? How long are your expected lease up times/vacancies? If the city/area growing in terms of economy and population?

There may be nothing wrong, but just to be on the safe side, I wanted to point out that not all new construction homes are a good investment.

@Jacob Gallup two things: A "used house" is not the same as a used car. If it has been lived in normally then it should appraise equally with the new one down the street. Secondly, most states have a construction defect period of more than 1 year that should protect you from some sort of major problem (do your due diligence) AND you can purchase a home warranty for the major appliances and furnace, etc. for a few hundred bucks. Keep the $5000 in your pocket and ask the seller to buy you a warranty. 

I'm with Anton.....why are there lots of vacant homes in the area.....and why is this seller getting rid of it only a year later? For all you know the place may be a lemon....horrible construction...... etc...there may be a good reason this guy is bailing so soon

IF its a good area and no red flags to tell you its not a good rental, then I would try to negotiate the price even lower on the used one, and probably buy that one...put a few buck in it to make it essentially "new" and keep the extra $$

I wont answer your question, but raise another one. Why is this home being sold only 1 year after purchase, and why are the others sitting? Perhaps this is not as great of an investment as you had hoped.

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