I am currently deciding between purchasing a duplex, or two single family rental properties.
Typically I’d always go duplex, but in this case, the duplex needs severe renovations. it’s about 70 years old, has aluminum wiring and all cast iron plumbing. Because of this, insurance is through the roof and I’ve only found one insurer that would cover the property after working with multiple brokers.
The total up front costs (down payment, renovation, insurance, & closing) are almost equal. The two single family homes are more expensive, and would also require some up front renovations but nothing too crazy.
All in all, what would you prefer?
The duplex would require about $125K between down payment, closing costs, renovations, & insurance.
The 2 single family homes would require $140K for the same.
Net monthly cashflow post renovations is a bit better for the duplexes. Property appreciation, liquidity, and tenant quality is better on the single families.
the 10 & 30 year returns are about similar and have more to do with local area changes than their economics today, so it’s somewhat of a shot in the dark there.
Curious to hear from other investors. My current portfolio consists of both SFH and duplexes.
Deciding between 2 single families or a duplex, thoughts?
byu/NCC1701-F inrealestateinvesting
Posted by NCC1701-F
3 Comments
My life is run on vibes, for me the choice would be which one my gut feels is right
In the scenario you have outlined I really like the two single-family homes. I have both as well and in my experience although the single-family homes haven’t produced as well as the duplexes they have come with less headaches and better appreciation. I get shot down all the time for liking single-family as much as I do but it has been really good to me over the years…
SFRs are more liquid and you have a better class of tenants. Duplex tenants are not bad but with SFRs you’re likely to have a family there