Need ALL Advice/Tips on renting out a duplex! (new to it all)

2 Replies

Hello all! 

Wanted to share a few questions with you all in regards to buying and renting out a duplex. My wife and I are interested in making our first home a duplex in Indianapolis, and rent the other side. I have a (sort of) plan for the next 5-10 years on how I want this to play out... and I wanted to get some advice from people who know what they're doing before taking any major steps. I understand that with A LOT of this information, I will need to be more specific. However I would like to hear of any cautions or hurtles that you all foresee. 

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Here, in essence, is my plan:

- Purchase a duplex (2019) for 70k - 130k. I have around 5-8k for a downpayment. The goal would be for it to rent-out for $650 - $775. (The duplex will probably be a fixer upper, nothing too major but I will do some updates.)

- Live in one side of duplex and have a renter on the other side . While Tennant is paying rent, save up money for a downpayment for a second home.

-After 1-2 years, move out of duplex and rent out the entire property. use all cashflow from that property to pay mortgage.

-Then find another duplex, or small SFH (roughly same price range) and do the same thing. Use saved money and equity for DP on this home.

-(Finally) rent out both duplex's and purchase a home to raise a family. 

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Here are my questions: 

-Any general advice from rental property owners on this?

-Is there a different approach that you might take to invest? 

-What should I have saved up for "rainy days"? 

-Aside from area, what are some of the best ways to get the most out of a property?

Thanks so much for your time and advice!!!

@Lamont Glover II

This is an achievable plan, trust me. First, buy in the nicest area you can afford. You want your place to have the most upside it can get with regard to rents. Find a place that has one side rentable. You need to live in the side that is less rentable and fix it up while living there. Then when that side is done, switch sides if needed so you can make improvements to the previously rented side. 

Stick to your improvement/budget plan. You will definitely get some scope creep. Once you start making improvements you’ll see other thing you didn’t plan to fix will tempt you into opening a new can of worms. 

When you get an inspection done, definitely have the main drain line scoped. With theses older duplexes, the main line, plumbing updates and rewiring are your biggest potential upgrade expenses. 

Improvements don’t need to be fancy but they do need to be bullet proof (figuratively speaking).

No carpet. 

If the sewer line looks good, you will probably be safe with a $4k emergency fund for the short term. That amount will cover a furnace going out and a major appliance going out in the same month. 

Good luck