Buying a rental property?

Buying a rental property?

Well, i'm getting the itch to own my own place and stop renting, and i've been looking at buying a Duplex (Side by Side).

Just wanting to get some opionions and thoughts on it.

It is only 2 years old, with siding and a large wood deck on the back (or each), it is on almost a half acre of land, so it has a decent backyard for a city. It is about a 5~7 minute drive from the downtown area. It has 3 bedrooms and 1 1/2 baths on each side. Ceramic tile, hardwood and carpeting. Private entrance and driveway for each side. Central vaccuum. There is appliances staying on both sides, fridge, stove, dishwasher, all only 2 years old.

They are asking $168 000, I think I can get it for $155 000. At $155 000, the morgage is about $925 a month (maybe lower if I can get a lower interest rate). The other side (when looking at comparable duplexs) rent for $850 to 900 a month with nothing included. So I should get $850 a month in income from the property, and property taxes are approximately $200 a month.

So, $1125 a month in expenses, $850 a month in income, so it would cost me $275 a month to own the place (plus my utilities, but they are under $250 a month). Just wondering what you guys think. Thanks for any input!

i would jump on that in a minute! Here looking to buy a two family house to rent one floor it would be around $550,000 average. hell, a freaking 1 bedroom apartment in a building goes for $145,000. Then again, it is NYC, but owning real state is the best way to build equity. I wish I could buy a duplex, but as it is I hope I can buy a second apartment in the near future.

Living with your tenants might be hard, but sometimes depending on who you rent to it may not be too bad. Just be picky with who you rent to.

X

Yeah, renting is a waste. Good for you.
Have you talked to a lender and do you know how much they'll let you borrow?

As a rule of thumb you don't want your mortgage to be more than 1/3 of your income. Some banks will go up to 40%. I'm not sure what your situation is, but if your over that I would go for it! You don't want to get into it depending on a renter, unless you have some cash saved up for a while. I don't know, are places renting fast there? Just make sure you have it inspected by an engineer before you buy. You may want to pay for closing costs if you really want it to go through.

Sounds great. Around here you can't get a duplex like that for under $250k. I'm amazed at how new and inexpensive that place is! Is it a foreclosure?

A duplex is a great investment, eventually you can move out and have both sides rented and it will become an asset instead of a liability!

Investing in real estate is a sure way to get YOU out of the rat race!

Good luck...

I'd be living next door to them, but everything is seperate. I would be very picky on who moves in, they'd have to be employed, have references, etc. I don't think with 1 tenant it would be too bad, I'd live on one side for the first few years instead of renting out both sides because I might have to move in about 2.5 years and I wouldn't want to build a house here and have to sell it right away. This way, if I do have to move, I can just rent both sides out and get a family member (prolly my mom) to take care of it.

The price is actually around the avg. price for a new duplex around here, real estate isn't that expensive around here. Apartments rent for $550~$750 a month for nice ones. The mortgage payment is around 45% of my income, but, me and my gf are going in on it together, so it would be around 28~30% of our joint income. We haven't talked to a lending institution yet because we are still thinking about if we should buy a rental property or not and looking at cost, legal issues, etc. We don't want too many surprises.

If from your joint income it comes out to be around 28~30% I would suggest giong into buying, but find out about all the other legal issues and cost and taxes for the place before you decide on it. That way you won't be surprised when the bills start coming in.

Apartments are a waste of money , go for it man sooner or later you'll have to

Sounds like you've got everything down except for taxes and legal issues. As long as you can deal with those, it looks like a great oppourtunity for you!

Just make sure your g/f is tight with you or your cover your ass legally...
I hope you two are serious and stable.

What state / county do you live in?

... never mind, I just had to look around a little. Nebraska!

lol, not Nebraska, New Brunswick, Canada

Me and my gf talked about it, we went to see that duplex and a few others and theres 2 that we like, but we decided to wait until next year because she will know at that point if we will have to move for her university or not (she's going into medicine, but she can only do the first 2 years here, after that, she has to go to a medical school, and she'll know next spring if she go accepted or not)

You guys are smart!

hahah Nebraska. I was thinking those housing prices sounded too good, figures it's in Canada.