How to know a duplex is a good deal?

5 Replies

I am starting looking at duplexes and I am just not finding very good value especially because I am planning on doing the FHA 3.5% down and live there for a year starting out. I have found many duplexes that are around the 220,000-275,000 range that are only charging rent at the rate of 950-1250 per month on one side. I really was hoping to find a property that could essentially take care of the mortgage costs plus maybe a bit of the utility costs as well as some taxes as well. Is this a little too optimistic? In reality I've only been looking for the past couple weeks but is this something I should be looking off of mls? Any advice is recommended. I am out of the Minneapolis/St. Paul in Minnesota.

You may want to start looking in other areas. Start from the questionable urban centers and work your way out to the suburbs. Somewhere along that geography you will probably find a transitional area where the rent to price ratios are closer/better and you are still comfortable living there. 

Living in it is a great idea. You can do this repeatedly and end up owning several as years go on.

Normally that isn't unrealistic, but the MF market is very strong/expensive right now.  It also depends on what area you are looking.   If it is a nice area duplexes will go for quite a bit, they are easy entry assets so there are a lot of buyers to compete with that will drive values up.   On the positive side they are easy to sell for higher values. 

Personally I would buy a duplex over a Tri or fourplex for this reason.   

Originally posted by @Larry K. :

You may want to start looking in other areas. Start from the questionable urban centers and work your way out to the suburbs. Somewhere along that geography you will probably find a transitional area where the rent to price ratios are closer/better and you are still comfortable living there. 

Living in it is a great idea. You can do this repeatedly and end up owning several as years go on.

 Thank you @Larry! I appreciate the idea I will definitely do that. I did start out in a nicer area where it is much more desirable so I will start to look at transitional areas as well. Excellent idea!

Originally posted by @Michael Tempel :

Normally that isn't unrealistic, but the MF market is very strong/expensive right now.  It also depends on what area you are looking.   If it is a nice area duplexes will go for quite a bit, they are easy entry assets so there are a lot of buyers to compete with that will drive values up.   On the positive side they are easy to sell for higher values. 

Personally I would buy a duplex over a Tri or fourplex for this reason.   

 That is a really good thing to know. I agree it seems to be expensive, unfortunately this is where I find a need to begin, thankfully I am single so I can also rent out a room or two on my side and ad some value while I'm living there for the year. Thanks for the thoughts Michael, any thoughts about areas in Minneapolis area that are a good value right now even if they are expensive?

i just bought a duplex to live in in the mlps area. robbinsdale has a few at reasonable prices

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