Real Estate Agent · Saint Petersburg · Member since 2017 · 11 posts · 5 votes
Is it better to have 1 100,000 dollar rental or 2 homes on the same lot not a duplex for 200,000 dollars?
I am looking to buy a rental before the end of the year and am trying to decide if I should go after a single family home for around 100K (115- 95) (known as property "A" or get a single family home that has two units on it home with a carriage house around 200k (190 - 215( known as property "B").
The "A" home would get around 1000 a month in rent and the "B" would get about 1800 together in rent.
The "A" home is in a little worse area but is growing in popularity. The "B" home is in a good part of town but not a ton of growth. Taxes would be a little higher with "B".
Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes
7y
I would stick with one home for 100,000. Less potential for drama and you still have an extra 100,000 to do it again. BUT only if you can get a solid tenant pool in the area of property "A". If it's still hard to find reputable tenants to rent out the property because it's in a bad area, then it's going to be a risk tolerance question.
A potential upside would be that A home could increase rent/value if the area continues to gain popularity and desirability.
Real Estate Agent · Saint Petersburg · Member since 2017 · 11 posts · 5 votes
7y
@Cassi Justiz Thank you for weighing in. Yes, I am a little worried about getting good tenants in the "A" property. The area is getting better but I am not sure how much and how fast most homes are still using section 8 (which I don't want to do). Property "B" is in a much better area and I think I could find higher quality tenants for it, but I am a little worried about its appreciation value not being as high.
Rental Property Investor · Edmond, OK · Member since 2017 · 1k+ posts · 1k+ votes
7y
Understandable, @Cameron Sylvester. A section 8 rental that is barely hitting the 1% rule is a bit risky. You probably won't be able to find many high quality non-section 8 tenants that choose to live in a primarily section 8 area.
I wouldn't count too much on appreciation in our current market. Obviously no one knows what the market is going to do, but statistically everything says that we are due for some form of a downturn in the near-ish future. Definitely make sure your numbers work from a cash flow perspective first, and then think of appreciation as a nice bonus. :)