Help with deal analysis: SFH vs. Duplex
Hi all -- I'm hoping to get some input on two properties I am deciding between. Both are in a working class suburb north of Dallas (The Colony for you DFWers). Here are the numbers and some information
Property #1 is a 3BD/2BA single family home with 2 car garage and decent size fenced yard that has been fully rehabbed. Very little work will need to be done. The rehab was high end: granite counters, travertine showers, stainless appliances, bamboo floors, new siding, foundation repair. It is near a middle school and close to the new Toyota HQ, and a large retail complex that will be completed next year.
The sale price is $163,000
Anticipated rent is $1450/mo
Taxes $200/mo
Insurance $80/mo
Repair reserves $100/mo (just a guess on my part)
Property mgmt $160/mo (based on assumption of 12% of rent, but I will do myself so not a true expense)
Debt service (P&I) $670
Cash flow: $240/mo (if I include a vacancy allowance, its about $120/mo)
Property #2 is a duplex. Each side is 2BD/2BA with a small side yard. No garage, just 2 spots on a parking pad for each side. Same high end upgrades. It is on a street with other similar duplexes near a playground. It is a little farther from the new office/retail development than property one, but in a slightly quieter neighborhood.
The sale price is $230,000 ($115k per side -- apparently duplexes are separately deeded here in Texas so I'll have two mortgages)
Anticipated rent $2200 (one side allegedly already rented at $1200/mo, I'm being conservative by assuming $1000/mo for the other side)
Taxes $260/mo
Insurance $167/mo
Repair reserve $125/mo
Property mgmt $240/mo (same as above, I will handle myself)
Debt service (P&I) $946/mo
Cash flow: $460/mo (same caveat for vacancy allowance)
My initial thought is to go for the duplex because its more cash flow and slightly less risk that you would be without both tenants at once. But I think the cash flow on the SFH is acceptable and appreciation might be better. My hsuband is concerned about the duplex not having a garage and wondering who would rent a duplex if they could get a 2BD apt with more amenities for the same price. These are valid points. BP experts, what say you?
Thanks in advance!