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Originally Posted by XPorn
I may bid on a duplex that will cost about $215000
if I put $43000 down....that leaves a loan of $172000...and at 6.5% thats about $1090 a month.....taxes are $300 a month...
Rents = $1600 a month....
Leaving about $200 extra per month for insurance and lawn work/water bill....
Worth it???
XPorn
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You are not accounting for serveral factors...
How old is the duplex... more importanly, how old is the roof, ac/heating, does the plumbing work properly, etc..
If it were a brand new house then you can figure as you mentioned couple hundred extra for upkeep. BUt i am assuming it is not a new house. New roof could cost you 2K - 5K depending on what type of house and how big. So if you need a new roof in 5 years you should be putting a portion of the rent money aside for that. Then there is always the unexpected problems, it happens.
Also you shouldn;t have to pay water, there should be two water mains to the duplex, but if you have to pay it then you better factor in worse case senerio and a family of 8 moves in and takes lots of showers and washes cloths and leaves the damn hose on all the time or your old damn bathtub drips and your toilet runs. 1 of the 2 sides could cost you more then $200 in water. I don't pay any utilities too risky.
The other thing you need to factor in is vacancy. You have to figure at the very least a couple months a year vacancy, 10% is a fair amount. Even if it is strong rental area, you will still have some people move out in july and next people cant move in till sept1.
If you decide to do it then you better make sure you can pay the note with out any income for several months. You WILL get people who will pay late and in some cases they will not pay and you will need to evict them.
Iwould get a quote on insurance too so you know exactly how much it is.