Multi-Family and Apartment Investing

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Should I buy my rental (duplex)?

Posted Jul 20 2019, 10:37

Hello all--new to the real estate thing. My landlord is selling my duplex, which I currently rent one unit in. It's walking distance to a major university, walking distance to downtown, Whole Foods, Trader Joe's etc. I've loved living here and they've done a ton of work to bring it up to snuff (including replacing most of the foundation). I've been looking for a single-family home in the $250,000 range ($1750 monthly payment including all utilities, savings for maintenance, etc), which is the max I can afford as one person.  My landlord wants to sell the duplex for $380,000 ($2669 monthly payment). I estimate that If I rent the other side for $1500/mo, I can get my monthly payments to roughly the equivalent of my current rent ($1169). But do I take the risk? As a first-time buyer, what am I missing/not considering that would change my mind one way or another? 

Thanks all! I'm so glad I found this place! 

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Jon A.
  • Asheville, NC
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Jon A.
  • Asheville, NC
Replied Jul 29 2019, 19:07

@Robert Ombres, you are absolutely correct, thank you for the clarification. @Rebecca Helm is this an older home that could be turned back into a single family at some point in the future? If it is that might change the conversation a little. I am not sure which would sell better to be honest, a single family or a duplex. Maybe Robert could answer help with that answer. 

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Replied Jul 29 2019, 19:22
Originally posted by @Robert Ombres:

@Jon A. though I think you know this, let's not put out information that isn't accurate- VRBO's aren't "illegal." Short Term Rentals, anything less than 30 days, are not allowed in most residential zoning areas. There are a few zoning areas they are still allowed and there is also the ability to have a homestay permit which will allow up to two bedrooms to be rented short term. I believe you understand that, but it can be confusing if you throw out a blanket statement like the one you did.
With that said, rentals 31 (30?) days or more, aren't being regulated against. These aren't considered "short term." These can be advertised on VRBO/AirBNB/wherever.

You are absolutely correct- the many apartment buildings are what is causing rental rates to soften. It really is incredible how many are being thrown up in the greater Asheville area.

That and new construction developments are having a (small) impact as well. Each of these developments will see a small percentage of homes purchased for rental purposes.

@Rebecca Helm a few questions for you.

Why do you think you can rent one side out for $1500 if your rent is only $1000, utilities included?

Your numbers show $6000 for utilities, not counting water/sewage/trash. So that's electric, what else? You're not seriously paying $500/month on electric, are you?

AirBNB, regardless of what WAX and the many other FB groups may lead you to believe, aren't the (primary) reason for increased rent rates. I'm sure they have a small influence in some cities, but not Asheville. As Jon spoke on, AirBNB is highly regulated in Asheville. Rent rates are high because of other factors impacting supply and demand (the ultimate reason). Frankly, there's a housing shortage with no significant push to correct it. NIMBYs are highly resistant to improving the area's infrastructure and new development.

@Account Closed $25k roof? $30k plumbing? Those numbers are insane. She could renovate the entire place with money like that.

Great question. The other side is a two bedroom unit, hence the higher rate. Your right about utilities--I believe the number they gave me includes trash, recycling, and water. I had been calculating those separately for SFH and forgot to remove them. Good catch.

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Cindy Coker
  • Rental Property Investor
  • Asheville, NC
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Cindy Coker
  • Rental Property Investor
  • Asheville, NC
Replied Aug 8 2019, 07:11

@Jon Arsenault hey Jon, we have a N Avl duplex on Hy Vu above Merrimon. Where is yours downtown?

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Cindy Coker
  • Rental Property Investor
  • Asheville, NC
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Cindy Coker
  • Rental Property Investor
  • Asheville, NC
Replied Aug 8 2019, 07:21

@Rebecca Helm hi Rebecca. Where is the duplex you’re considering? Ours is a mile from UNCA, so I think not far away. A street name might help with the neighborhood aspect of valuation. Asheville’s market is interesting to say the least!