Answers
Are duplexes a good investment?
i am a full time student with enough cash to purchase a home (good savings and job!) i am only 20, in canada and want to purchase something NEW (3 years or newer) close to the university. i have found some great brand new duplexes still being built that i can afford and they are environmentally friendly which is AWESOME!! rare to find in a builder. is a duplex a good investment over the house? i could afford a house with another person, but the duplex mortgage payment alone...oh and also i will have 1 renter to help with the mortgage payment. i REFUSE to pay rent because its a waste of money so i am still at home with my parents. thank you!
Best Answer:
Hi Jessica, First of all I want to commend you for even pondering this type of thinking. I have no doubt that you will be a millionaire before my age which I will discloe. ha, ha. Yes, you are definitely on the right track. A duplex is good investment specially that you say it is close to the university because this will provide a good source of rental prospects for you. Make sure that all tenants are under written lease agreement even if they your friends. No Exceptions, believe me it will save you a lot of headaches. The only concern would be qualifying for the loan and your income. But you also say that you have a partner, just make sure that you have a written agreement with a partner and notarized. In case the partnership goes sour there is a legal agreement in case you might ever have to go to court to liquidate or buy one anothers half of the house. And your absolutely right about the renting part too. Jessica I would not hesitate on this investment but just make sure that you have an attorney of yours check out your contracts and paperwork thoroughly, it's money well spent. ( Very Important ) because you have to live with anything on the contract after you sign it. Go for it and don't listen to critics unless they can offer good advice. Good Luck
Answers:
If you can pay cash for the duplex it would not be a bad investment,except you would be a live in landlord so your privacy may be compromised by tenant problems.
If you have to borrow the money you increase your risk by becoming dependent upon a renter to make a part of the payment. Also, as an owner you become responsible for all maintenance, upkeep, etc, which can tend to be higher when renting to college students. Rent is not necessarily pouring money down a rat hole. Especially if you intend to sell the duplex after university. Don't know about Canada but the housing market in the states is in the tank and many not recover for several years.
I was taught a duplex is not really a good investment. It tends to have "more heart in the price than facts".
What do I mean? Usually duplexes are bought by relatives who are closely related, such as a mother-daughter, and don't mind being almost in each other's business.
A 3 or 4 unit building is more suited for those folks who would like to invest in income-producing real estate.
In this type of investment, there are many things the building should have:
1] As much as possible, have separate meters for water, gas, heat and electric. When tenants know they are paying for their own utilities, they use A LOT less of that utility.
When the landlord pays for utilities and services, the tenants tend to abuse those items.
2] The building must be up to code and be subject to inspections by the local municipality.
There are other items.
My suggestion: Make the investment in-time to get pre-approved for the mortgage AND to find out about First Time Buyer Programs in the area you're interested in.
You should also make the investment in time with a knowledgeable sales person - familiar with income-producing properties.
Thanks for asking your Q! I enjoyed answering it!
VTY,
Ron Berue
Yes, that is my real last name!
i think duplexes are a better investment than a house. I'm kind of inclined to tell you to just go for it.
But you might want to do a little research first. The best real estate investment advice that I've seen comes from John T. Reed (http://www.johntreed.com).
I'm not trying to pitch for Reed, it's just that I've read some of his stuff and was really impressed.
Plus he answers his own emails.