Cashflow and the duplex next door

So, I’ve been biding my time, not really thinking too seriously about buying the duplex next door (but thinking about it, nonetheless). It went up for sale a month ago, and the sign is still there. I haven’t seen a great deal of activity there (both units are currently vacant), although they do periodically mow the grass (not really as often as they should when trying to sell the place, however.). All of this cashflow 101 playing has gotten me wondering a little more seriously about it…. and doing the math over again.

No longer a speculator’s market

OK, so this is technically old news, (the article I’m quoting below is from 7/30/06), but I still find news about the movement of the housing market interesting. I’m happy that the current swing of the housing market is making the rental market more in my favor (even though I just signed my tenants into another year lease). Owning a duplex kind of puts me in a good place regardless of which way the housing market swings — if appreciation goes way up, and it’s a seller’s market, I’m in a good position to cash out and sell my duplex. If prices slow down, and so does appreciation, it becomes more attractive to rent than to buy, and my rental market goes up (lower vacancy rate = higher rents and more tenants to choose from).

Property taxes… and the info on the assessor’s website

I just paid my property taxes this morning. I’ve chosen not to escrow my taxes and insurance with my mortgage payment, so that I can save the money up in a bank account through the year, and earn interest on it. (5% in an Emigrant account is nothing to sneeze at). So that means that twice a year I need to log into the county assessor’s website and send a payment via e-check (of course, if I planned ahead, I could also snail-mail it). They do keep going up, though. I’ve chosen not to raise the rent on my tenants if they signed another year lease, so the increased property tax bill just cuts into my profits. At least, though, the money that I pay in property taxes is deductible (on my 1040 for my personal half, on my schedule E for my rental unit).

Buying a fourplex

My Uncle, a real estate agent, recently inherited some money, and decided to use it to purchase my duplex’s big sister, “the fourplex.” Not sure exactly if they purchased it out-right, most likely they just used it for a 20% or larger down payment.

How is buying a fourplex, or four-flat different than buying a duplex?

It’s beginning to look a lot like … time to do my taxes…

Tax benefits are one of the biggest reasons that buying a duplex is a good idea. Yes, the tax benefits of owning a duplex are pretty nice, especially that whole depreciation thing. However, the catch here is that your taxes get a LOT harder to do, once you own a duplex. I went from being an apartment dweller who filed a simple 1040EZ to having a bunch of (fairly) detailed schedules to fill out every year. And while the schedules themselves aren’t actually that hard, once you figure out what you’re doing (or find someone to pay to figure them out for you), the biggest part is something that only you can do: Keeping track of your expenses. Well. In an organized fashion. Preferably throughout the year.

Pros and Cons of Owner-Occupied Duplex Living

I’ve owned my duplex for a little more than three years, and have lived relatively peacefully on the first floor, with my tenants above me. While not an ideal lifestyle for everyone, being an owner-occupant has allowed me not only to become a homeowner much earlier than otherwise possible, but it’s gotten my foot into the real estate business at a time when it’s booming.


Tips for buying a duplex

I recently received a comment on this blog, asking if I had any top tips for buying a duplex. Here’s my best shot:

Buy in the best neighborhood you can afford. If you do this, even if your house isn’t the nicest one on the block, the values of the houses around you prop up your property value — and rental value. It’s tempting to look at the house as an island, but when you’re trying to find renters, they’ll be looking at the duplex, and also the context that it’s in. They’lll be checking out the houses to the left and right of it, the other side of the alley, across the street, and all around the block…

Investment Property and the Single Girl

I bought a duplex as a single, 27 year old woman. I had gotten the real estate bug, just like everyone else, but my options were limited. Condo prices had skyrocketed, I was kind of creeped out by the idea of living in a single family house all by myself, especially in the neighborhoods that I could afford one in. Even then, my options were crackhouses and places smaller than the apartment I was renting.