Is it worth buying a duplex somewhere to live in and rent if I will be moving in a year?

18 Replies

I am going to be living in Denver starting in August.  I was wondering if is it worth buying a duplex somewhere to live in and rent out the other side if I will be moving in a year?  I would have to mortgage the duplex also.

Sure, if prices in that market make sense.  Above all, as an owner-occupant you can take advantage of better financing options and rates; when you move out in a year, rent the other side as well.  You retain the great financing and now are cash-flowing on both sides.  This presumes you plan to hold the unit.

If the numbers make sense then yes it is worth it.  Duplexes out here are definitely priced at a premium, but they can be found as @Scott Trench can vouch.  It will just take a little more diligence.

What would you do with it after the year? If you plan on selling it after a year then it's not advisable. Usually 2 years is the minimum time to hold before selling. 

If you plan on turning it into a rental then it seems like a good plan. This would be the house hack approach. Rinse and repeat every year.

Thank you everyone for the advice!

my husband is active duty and we move a lot. I have written how having a transient life style can be amazing. We buyall houses even those we live in with the mind for future rentals. We have done very well as the interest rate and down payment are much lower! 

I would do it if you are willing to be a landlord from a distance.  As long as you can find a decent management company to take care of it for you.  Visit as often as you can to make sure everything is being managed well (once a year or whatever).

In general, it can be a great idea!  But, it is all about the specifics of the individual property and investment.

Check this property out, I just listed this yesterday. MLS# 6114809

Seems like there are a ton of people trying to do this to offset the cost of living here in Denver, as my phone is ringing off the hook on this property.  

I spoke to a friend that has an air bnb property here in Denver that he rents 26 days a month on average.  If you can do that with a two unit property, you are getting paid to own the property and live there at the same time.  

These rarley come on the market with both sides or both units however, so its slim pickings out there right now.  

Property Management is what will make or break this deal even if all the numbers work for you. Highly encourage you to reach out to local property managers and investors to find out if you can find one that will help you make long distance landlording a success. Wish you the best!

Another question for everyone... I will be super busy with work and travel while I am living in Denver, could I hire a property manager from the beginning for even when I'm living in the duplex?  Then that prop manager will carry over my side of the duplex also when I move out?

@Brandon Monaghan

Yes, you could have them cover one side and then have them transfer over to both sides when you're done there.  I would even make it known to the property manager that I don't want the tenant knowing I'm the owner.  Some may not do it that way, but it would help keep the tenant from asking you for things instead of the property manager.

If the numbers make sense as an investment, yes it is worth it.  Especially if you can take advantage of the low money down and low rate of a 1st time homebuyer loan.  Be sure to check while researching financing options how long you are required to live in the home to get owner occupied financing.

@ brandon monaghan I did that exact same thing with our duplex in Denver so it is definitely doable.  Just make sure that you are comfortable with the PM.  Interview a few & while you are physically living in the unit, "test" the one which you choose to see if they operate in a way that you like.

I really appreciate all of the feedback everyone!  Does anyone have recommendations for someone to contact for homes in Denver?

Originally posted by @Brandon Monaghan :

Another question for everyone... I will be super busy with work and travel while I am living in Denver, could I hire a property manager from the beginning for even when I'm living in the duplex?  Then that prop manager will carry over my side of the duplex also when I move out?

I think that this is a mistake - just my personal opinion though.  One of the great things about being an owner-occupier is the fact that you get to manage one of the the easiest businesses of all time.  I'm not saying that real estate is easy so don't misquote me there, but relative to almost any other business you can purchase that has a reasonable chance at producing revenue, the property manager/house-hacker has to be up there.

Your tenants are right next door - you know if they aren't treating the property well.  You know where the check is coming from.  You can go and fix problems in seconds, 10 feet away.  Maintaining the property is virtually the same as running a household.  

Hiring a property manager to manage my duplex would likely cost me around $200 per month.  Managing the property was a grand total of 20 minutes last month.  

This is a very different story if I had 5 rentals or had rentals more than an hour away, but the managing I do is less than 20 yards from where I sleep!  I'm not busy or rich enough to say no to a $200 per hour job.

@Scott Trench

What about having a partial manager?  If you don't have the time to take the calls that may possibly come in when you're out of town or swamped at work wouldn't some sort of management be helpful?

Originally posted by @Dan Mackin :

@Scott Trench

What about having a partial manager?  If you don't have the time to take the calls that may possibly come in when you're out of town or swamped at work wouldn't some sort of management be helpful?

I don't know about a partial manager - I haven't considered one to this point.  I just can't see many emergencies arising that I couldn't take over the phone and call the plumber, electrician, police, or handyman.  My tenants have called me about various minor issues, and each time, I asked them if it was ok if I took care of it on a prompt timetable, but convenient to both of us.  This includes a minor plumbing issue, screen repair, and facilitation of online rental payments.  That said, everyone is different.  If I was making less than perhaps $50-$100 per hour at my job though, I think I'd be happy with the $200 per month in my pocket for relatively convenient work.

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