Hey there, folks! So, I’m in a bit of a pickle right now trying to figure out whether to invest in a duplex or two single-family rental properties. Normally, I’d jump at the chance to snag a duplex, but this one I’m eyeing needs some serious TLC. It’s like a time capsule from 70 years ago, complete with aluminum wiring and all cast iron plumbing. Because of its dated features, getting insurance for this place is turning out to be a real headache. After talking to several brokers, I finally found one insurer willing to take on the risk.
Now, when it comes to costs, both options are neck and neck. The duplex and two single-family homes are pretty much on par in terms of upfront expenses – we’re talking down payments, renovations, insurance, and closing costs. For the duplex, I’m looking at shelling out around $125K, while the two single-family homes would set me back about $140K.
Here’s the deal: once the dust settles and the renovations are done, the duplex would bring in a slightly better monthly cash flow compared to the single-family homes. But, when it comes to property appreciation, liquidity, and the quality of tenants, the single-family properties take the cake.
If we fast forward a decade or three, the 10 and 30-year returns for both options seem pretty evenly matched. It’s hard to predict how things will pan out in the long run since a lot depends on how the local area evolves over time. It’s like taking a shot in the dark, really.
As for my investment background, I’ve got a mix of single-family homes and duplexes in my current portfolio. So, I’m no stranger to the ins and outs of both types of properties. But, hey, I’m all ears for some advice from fellow investors out there.
So, what do you think? Should I take a chance on the potentially lucrative but risky duplex, or play it safe with the more stable single-family homes? Decisions, decisions…