Thursday, July 3, 2014

Prime Investment: Duplex or Single-Family Home?


If you are thinking about buying your first home, you may wonder if purchasing a duplex is a better investment. You can live on one side, rent out the other side and have your mortgage paid by the tenant. Sounds good, right? Unfortunately, it doesn't always work that way.

Profit Potential

There is great potential for profit with a duplex or any multi-family property. However, many of them are over-priced because they have been bid up by investors that don't pay attention to the profit potential. Many of them don't even have a good cash flow.

So, how can you find a good deal? First, you want to know that the property will have a positive cash flow. You also want to know the numbers to determine if you are getting a good deal. The "numbers" consist of how much money is coming in versus how much is going out for the mortgage payment and maintenance, and how much the property will appreciate over time.

Get Professional Help

If you have never bought an income property, it is best to work with an experienced professional. Contact an accountant that can run the numbers on any property you are interested in to find out if it is worth your time and money.

Other Considerations

The benefits of owning an income property are numerous. It can often be a better way to start out home ownership than with a single-family home since you have a regular income to look forward to that helps pay for the mortgage. It not only gives you money now but has the potential to bring in income for the future.

One the other hand, being a landlord is a job in itself. It requires time and effort on your part to maintain a property that continues to bring in revenue. This is not meant to discourage you because real estate is an excellent investment. Instead, it is meant to encourage you to do plenty of research so that you are well-prepared for the challenges that await you. By doing so, you increase the likelihood that you will be successful in your investment.

If you are interested in buying an investment property, give me a call. I can show you what is available and put you on the path to real estate investing success.

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