Build or buy a used Duplex ?

Question

Hi I am new to real-estate investing and I would like to ask you all for some advice . I live in Pensacola, FL and have a residential lot that is paid for on the west side of town near the Naval Air Station, which is a big Navy base and is the Home of the Blue Angels. I was thinking about building a 2 unit Duplex on my lot that I own, and renting both units out with the use of a property manager. I still have much to learn and some numbers to crunch to see if it could be profitable . In Pensacola there is some local builders that can build a 3 bedroom 2 bath X 2 brick Duplex @2100 sq. ft. for around $150K-$175K range on your lot, will just call it a even $200k after driveway, electrical hook up land clearing and few misc.. items. My question is before I get to deep , is there a reason I never hear about anybody building new Duplexes? I only hear about people buying used ones and rehabbing them, then renting them out. Please let me know your thoughts and Pros and Cons of building new verses buying a used Duplex. This would be my first Rental investment.

Thanks Gang!

Jamie Church

Thanks Gang!

Jamie Church

Jamie Church · Answer

Thanks for the reply , I see your point. The numbers probably work better in the college towns and high rent areas.

Greg Dickerson · Answer

@Jamie Church grew up in Pensacola. I love the city.

To answer your question a lot of people build new construction duplexes to rent especially in college towns. There are a ton going on in my area and some of the surrounding area’s.

It really all comes down to cost. Many times it’s way cheaper to buy and renovate then it is to build so that’s the main reason you don’t see as much new construction going on. It’s not very efficient to build a duplex to rent when you can buy one for half as much in some cases.