To start I’m 21 years old. I was very fortunate to get into a trades apprenticeship at 19 and I currently make $41 an hour as a 3rd year. I got a few credit cards and a car loan at 18 so my credit is pretty good, ~770. I live at home and have a little more than $50k saved. With my job I have 2 pensions outside of the money I see, which is nice and gives me more incentive to be risky with my savings.
I’ve been looking and doing research and figured I should “house hack” a duplex. Around my area there was one that caught my eye, a $220k duplex. In my area I could probably charge 1k a month with no utilities, more if I included. I know owning a home is a lot of work, but I think this would be a very good way to live. Would it be a good idea to pull the trigger on this? What would be some advice if it is? Just need some insight, thanks!
Should I buy a duplex at 21?
byu/HuckleberryNo9234 inpersonalfinance
Posted by HuckleberryNo9234
14 Comments
Without knowing all the financial and details the easy answer would be yes.
However it can be really dependent on the property and the renters you get.
Maybe you end up with a renter who stays for 10 years and does all the light maintenance on their own.
Or you end up with a revolving door of renters who break shit and destroy stuff
I would NOT want to be a 21 year old landlord. Its a lot more headache than you think.
You’re in a really solid position for 21, BRAVO, good income, solid credit, and savings. That’s exactly how people get ahead early. House hacking a duplex is one of the best ways to build wealth IF THE NUMBERS WORK. I’ve done a lot of these, and I’ll tell you straight, it’s not just “buy it and profit.” There are a lot of moving parts.
A few things I’d seriously think through.
1. Run the numbers like a business not a dream.
Don’t just look at rent vs mortgage. Factor in:
-Taxes, insurance
-Maintenance (stuff WILL break)
-Vacancy (even if it’s just 1 month/year)
-CapEx (roof, furnace, etc.)
If it still cash flows or at least keeps your living cost very low, that’s a win.
2. Tenant quality will make or break thisScreening matters more than anything:
-Income verification
-Rental history
-Credit + backgroundA bad tenant can wipe out a year of profit fast.
3. Loan strategy matters a lotAt your age, look into:
-FHA (low down, owner occupied)
-Conventional 5% down options
-Make sure you understand PMI, reserves, and how rental income is counted
4. Utilities + layout = profitSeparate utilities if possible.If not, price rent accordingly.Little things like that can swing your deal from “okay” to “great.”
5. Expect it to feel like work at firstYou’re not just buying a place to live — you’re running a small business.Once it stabilizes, it gets easier.
Watch some solid podcasts Bigger Pockets is still pretty good, read some books, learn about tax strategy. It’s a big world, real estate but if the numbers make sense and you buy right, it’s one of the best decisions you can make. It surely was for me.
It worked for me. The property is now my best performing investment and I’ve purchased another single family to live in.
Get very familiar with your local laws, play by the book, and learn how to screen for great tenants.
> Around my area there was one that caught my eye, a $220k duplex. In my area I could probably charge 1k a month
I assume you mean $220K to own both halves of a duplex, you live in one half, and rent out the other half.
1 percent of 110K is $1100. You would be renting it for $1000. You are already below the 1 percent rule, so that’s not good.
Otoh, if you borrow 80 pct loan to value or 176K, at 6 percent over 30 years that is $1055 per month in PI.
Figure $100 a month for insurance and $300 for taxes, and that is $1455 a month PITI.
Half that for rental is $728 and so you are cash flow positive at about $270 per month. The rental’s share of your down payment is $22,000. 270*12 / 22,000 = 14.7 percent. Decent. Better than the stock market.
But higher risk. You need both good tenants and to keep it rented.
I think if you can rent it for $1200, it is worth considering.
Understand that being a landlord is a 7×24 job.
I did it at a similar age. It was great while I lived there, but not great once I got married and bought a different house to live in. When I was single and on site, taking care of stuff was no problem. When I wasn’t there and had other obligations it was a bigger hassle. Also had twice the tenant issues with both units rented. I’d say do it now, but don’t hold on to it if you aren’t living there. Exception might be if you have great long term tenants, but those are hard to find. Also, just have them take care of lawn and snow for a break in the rent. I didn’t mind doing it myself until I had to drive over there to do it after already doing it at my house.
You’re doing very well and real estate can be a good long term investment. But aside from the various pros and cons, you have to realize that owning rental property is a second job. It can be time consuming and take you away from other things in your life (like family). Since you have a full time job it might conflict with your work schedule and cause problems.
I owned some rental properties when I was in my late 20’s. I made a little money at it but not much and I wouldn’t do it again. Especially at today’s prices. Learn about the stock market instead and invest your money there.
Do you want a second job? That’s what being a landlord will feel like sometimes.
I did exactly what you are looking at doing when I was around your age. Only difference it was a 4 plex in a not very nice neighborhood.
I had a lot of people tell me, “Don’t do it!” “You’re too young!” “It’s too much responsibility!” But I had stable employment and tried it out. I lived in one unit while collecting rent on the other 3 which covered the mortgage and also paid a little extra every month. I did that for about 5 years then moved out and handed it over to property management for a few years and then sold it to buy some land and a house.
All in all, you will be fine. It is pretty simple. Just stock up an emergency fund when tenants leave and you can’t find someone else to rent to right away. And you’ll need some money saved for when you need to do repairs. You need to be on top of maintenance and tracking your expenses for filing taxes to take deductions.
It was a good experience and I sort of wish I would have stuck with it. I had grand ideas of owning half a dozen rentals at some point. The reality is though that land lords suck and tenants also suck. Having to file a notice to quit on some deadbeat that can’t pay in the middle of winter and he leaves your place trashed sucks. Sure you get the deposit but going after people that don’t have any money anyway in small claims is shitty. Also, having your boiler die in the middle of Christmas morning while you are 200 miles away is also shitty. The tenants complain constantly about the any and everything. Random vandalism around your property. Replacing refrigerators and carpets. There is a lot of unpleasantness that goes with owning a rental.
I guess my only advice is, don’t get into something like this thinking it is passive income because it isn’t. It’s absolutely more like a second job or serious side hustle. Looking back, it was still a good experience and a good way to save money / build wealth. It sort of got to a point for me when my career demanded enough of my time that I decided to quit the rental thing so I could have more free time to myself rather than hassle with the rental.
Here are going to be the more clear ups and downs of a duplex.
Upside:
With a duplex you can set yourself up with some amount of passive income very easily. One of my friends did that and due to rental price rises, he duplex rental covers the entire mortgage. So he lives for, “free,” but makes all of his other money doing his real job. Eventually when the duplex gets paid off, he feasibly can rent both halves and make double his money.
Downsides:
Duplexes don’t sell well because people don’t really like living with neighbors and a thin wall. What this means is that if you buy today at 220k, you might end up selling it in 10 years and that price might only be 250k. However if you bought something like a single family home and you sold that? You might be able to come away 300k.
That’s kind of how it goes generally.
I’d definitely do it but consider the added work you’re putting on yourself. You’ll be a landlord and have to deal with all the associated issues that come with that. Since you’re already doing trade work maybe you’ll have a lot of connections to other tradespeople that can fix things for you and lower costs as that will be one of your bigger headaches.
Also, you could use a management company but that would cut into your return on the rental, but might make it a more hands off investment.
Do it and live in one half, you might have more rights when it comes to who you can deny and for what reasons
Learn more about the average rent in your area for what the other side of that duplex is. If you need help or advise regarding it, look up one rental at a time on youtube. Some great videos and commentary to help.
What trade are you in?