- This is probably the only chance that I’ll have to buy the house (duplex) next door to me and be able to have control over who my neighbors are.
- If the place next door is rented to upstanding citizens who keep the yard looking nice, that makes my duplex look better when I’m showing it to prospective renters (or if I were to sell it).
- The more real estate I own, the more money I can potentially make (duh)
- Easy to manage (don’t have to travel for maintenance, showings)
- I’d still benefit from the “intimidation factor” that I have as an owner-occupant (keeps the riff-raff from applying, generally).
- If I owned both duplexes, I could combine the two yards – supplying a nice wooded area to the place next door, and additional parking to my current duplex.
- I could use the equity that I’ve earned in my current duplex as collateral.
- I have enough on my plate currently (I’ve recently started an unrelated business, and have been spending most of my time getting that off the ground).
- Financing would be a bit trickier, as this wouldn’t be a “homestead” property for me. I would have to put up a larger down payment (they usually require 20%), and rates may be higher.
- Property insurance would be more expensive — as an owner occupant, I currently have a standard homeowner’s policy. With a non owner-occupied property, I would need to purchase a commercial insurance policy, which is more expensive.
- I have heard that the duplex was “trashed” by its last batch of tenants. The outside could use some work as well. There would be a significant outlay of cash in getting the property up to a condition where it could rent for a good price.
- Cash flow. The current asking price is too high for me to be able to cover my mortgage, taxes, insurance, water bill, and repairs with what I could likely make in rent.
- Additional management time (I’d be tripling my current responsibilities as a landlord, as I’d go from 1 rental unit to three).
The verdict? Should I buy it or not? I’m not sure yet. I’m leaning toward no, but I do have a price in mind. I try to keep on top of what current rents are (even though my unit is currently rented), and I’ve been on the financial calculators to figure out how much I can pay per month on a mortgage in order to cashflow. I can find out what the property taxes are via the city assessor’s website, and I can guess on property insurance (at least ballpark-wise). If they lower the asking price enough, (or it sits on the market for a long time and I am able to get them to take a total lowball offer), I’d be foolish not to buy it. So, for right now, I’m waiting and seeing.