Are Two Single Family Homes a Better Investment Than a Duplex?

A duplex selling for $365,000.00 with each side rented for $1200.00 a month. Purchased with 5% down with a monthly mortgage payment of $1500.00

Versus...

Two single family homes selling for $135,000.00 each with each home rented for $800.00 a month. 10% down with a monthly mortgage payment of $500.00 for each house.

The duplex is in a better neighborhood(closer to schools and surrounded by single family homes) and is constructed better than the single family homes (better foundation, insulation, nicer interior finishing).

What factors should I consider when making this decision?

Thank you.

Comments for Are Two Single Family Homes a Better Investment Than a Duplex?

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Dec 19, 2009
Re: Single Family Investment Property versus a Duplex
by: Tom Karadza

Hi,

Thanks for the question...

Much of this will come down to your own specific goals.

The factors we consider include the amount of cash flow we'll earn versus the down payment required to secure the property.

We'll also consider maintenance and ongoing management of the property. Our experience has shown that single families are easier to manage than multi-unit properties (even small duplexes).

However, our #1 criteria is the area we're purchasing in.

Without knowing all the details and specifics of each community we would choose the property in the better area with the better construction.

We're always thinking of our exit plan for each property. And good properties in good areas are very easy to sell.

So with information we have here we would choose the duplex, but again, we don't have all the information obviously.

One thing to consider with the duplex. Is it a legal duplex or a non-conforming duplex? Some cities have by-laws preventing non-conforming duplexes from setting up in their communities.

Check that everything is legal and by the book with that duplex before you make any final decisions.

Ideally, track down a good Realtor who knows the area AND works with investors to assist you.

Hope this helps a bit!

Tom.

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