Hello, my husband and I are currently selling our house and we found a duplex in Newtown/Sandy Hook CT (a place we would like to live) and I started researching becoming a landlord, what owning a duplex is like, etc.
My questions are:
1. What is the best advice you would say for a first time investor in a duplex?
2. How do you know whether the property is worth investing in?
3. Helpful screening techniques for tenants (currently the property has one unit rented and we would live in the other)
4. How much money should we keep in savings for emergencies (I was thinking 7-10k minimum)
I know the current rent on the unit occupied is $1200/month (2 bed 1 bath)
I don't know what the sqft is of each unit but the total of both units combined is 1,682 sqft
Right now I know the property doesn't have laundry in the units (we would be adding that to each unit)
We also would want to add wall unit AC/Heating (save on monthly expenses as oil is expensive)
I don't think there are separate meters for utilities (I assume utilities are included in rent?)
I also wanted to add 2 storage sheds so that each unit has a shed they can store extra things in
My thoughts were that if we are adding features to the units/upgrades, does that mean we can charge higher rent (I was thinking $1350-$1500).
Newtown CT is a highly desirable town to live in and single family home prices are a barrier for many to enter that town.
My husband and I visited the property and it has .5 acres of back yard, and we saw the unit we would live in but not the unit the current tenants are in (if we want to move forward with this, we would find a time to see that unit).
The unit we would be in would be a downsize in space for us, but a better school system for our son (which is a huge reason we are selling our current home - to get him the best he can get).
I remember talking to my husband before we bought our first home about a duplex but he wasn't thrilled with that idea, but now he seems onboard and even a bit excited.
I just would love to hear from others who have invested - the good, bad, ugly. I want to make sure our expectations are realistic and this is a well thought out decision for us.
Thank you in advance to anyone who offers insight/advice/thoughts!
@Savannah Esposito welcome to BP. I would recommend the book "Managing Rental Properties" by Brandon and Heather Turner. It is available from Amazon or on here at the book store. Brandon runs podcasts here too.
Join an REI group and go mingle with folks there.
You absolutely have to make sure the tenants are paying rent regularly and you have to see that unit too. Get the property inspected and get all the paperwork before you close. Make all this part of your offer. You may need to get an Estoppel Cert signed by tenant and LL. Any money-deposits, advance rents etc are yours at closing. Don't allow any details to go unattended. There are property management courses available on line. I have no experience with those.
Read the book, join an REI group, and hang out here-you will be fine. All the best!
@Bjorn Ahlblad Thank you for your response!
I will get that book and start reading it and check out the podcast too.
So it's okay to ask for the tenant history with payment history?
I have a great inspector that I like and trust and plan to use him for the inspection of the property.
What is an Estoppel Cert?
I will search for the property management courses, didn't know they were available!
@Savannah Esposito Google is your super helper. Google 'estoppel certificate' you will likely find a form. Try searching here as well. Ask for anything from the seller. If the seller is uncooperative that's often a big red flag. The fact that you are getting a tenant is good only if the tenant is good. Ask for a rent roll, bank statements showing rents paid. existing lease, tenants original application hopefully with DL pic and social security number.
Going forward you will need leases and an array of forms; you can get those here, or by joining a local land lord association which I find essential. All the best!
What is the purchase price of the duplex?
Have you estimated the expenses vs. income, both for when you are living there and then if / when you move out? (Use the BP calculator or watch a BP webinar.)
Do you have copies of the leases? This should tell you who is responsible for which utilities.
Do you know for sure that there are hookups for laundry?
Who is responsible for lawncare?
Are you working with an agent?
Are you working with a lender?