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Your Questions About Duplex For Rent

March 23, 2012

Daniel asks…

Wentzville MO Duplex’s for rent?

I am interested at the cost for rental of a duplex in zip code 63385

Administrator answers:

Probably about $700-800 per month for a 2 bedroom, 1 bath place. Try these sites:

http://www.rentals.com/Missouri/Wentzville/duplexes-and-fourplexes-1z13yzm/

http://www.rentalhouses.com/search/Wentzville-MO/63385-1z1413p

http://www.rent.com/rentals/missouri/st-louis-and-vicinity/wentzville/zip/63385/

Linda asks…

Is it a good idea to sell my detached single family house and buy a duplex in the city instead?

My current intest rate is 5.625% with a 30 year mortgage, but my house is 2440 sq ft and I live there by myself, it’s way too big for me!

Would it be a good idea to sell my house and get a duplex in the city? There is a good market for renters there. I’m planning to spend $300k – $500k and put 20% down. That will get me just about any duplex in my city. However, interest rates are a lot higher now, so my monthly payments will be higher than with my current mortgage.

Typically, a $300k duplex will have units that rent for about $750 each per month, with tennants paying all utilities. A $400k duplex would be about $1000 per unit.

Also, I’m worried that a duplex will appreciate slower than a single family home, and that with a lower rate of appreciation it will not be a good investment.

Any advice on what I should do? If the duplex would increase my net worth by at least an extra $10k per year, I’d feel like it’s a good idea, but I’m not sure it can.
I’m more asking investment advice. I’m about 15 minutes outside the city in the suburbs, but I’d enjoy living in the city as it’s a pretty social area I’m looking at (lots of young professionals, things to do, etc).

I’m only 28 and don’t have any experience with invement propety, so even with the research I’ve done it’s hard to know if I’m making the right decision. I’ve tried to run the numbers the best I can. My plan would be that if I buy a duplex I would get a 30 year mortgage and keep it, eventually moving and getting another place, but continuing to rent it. I don’t want to do that if living in my current house (valued at $360k now) would be just as good of an investment, because I know a duplex would require more effort (finding renters, making repairs, etc).

Would anyone out there who has experience with invement propety make this move, assumming that the lifestyle would be acceptable?

Administrator answers:

One word of advice is that without specifics, NOBODY here can give you a more specific opinion on your situation.

Depending on your local market, you could be receiving at least $10k increase in value of the duplex. One thing that you will have with the duplex is, you will have more cash flow definitely but you will have more work to do than being a landlord for a house, more expenses, etc, etc. I personally invest in single family homes & townhomes, it’s a lot easier for me.

If you decide for the 2plex or 4plex make sure you have sufficient savings to keep you on time with the payments if you are not able to find renters for at least 4-6months.

If you are worried about the interest rate, it would be the same, nobody can tell you what your interest rate will be without specifics. Take into account that eventhough you are getting a higher mortgage payment with a higher interest rate you are also getting a lot of rental income for all the rooms so that will help you cover most of your mortgage payment.

In my opinion if you want to make your life easier, you could use the equity on your current home to move to a smaller house and rent out the big house. The rent could help you pay for most of the mortgage in the big house and you will have less headaches. That’s just my opinion.

Steven asks…

can you get a business loan for a duplex?

I’ve been out of work for 2 years and have about $10,000 (for a down payment) saved up and am thinking about buying a duplex to rent out for income.

Will a bank give a business loan to someone to buy a duplex? I would buy one that the tenets would more than cover the mortgage payment. I have good credit but no income, also I have rented out spare rooms in my home for 4 years…

My long term plan would be to pay off the duplex as quickly as possible, then buy another duplex… eventually own a few of them and have nice income.

Also a friend mentioned I should form an L.L.C. what are thoughts on this?

Administrator answers:

Man, what sucks is even if you find a place that will cash flow, lending is just hard. You’re not likely to get a business loan but since it’s less than 5 units, it will be considered a residential property so you should be able to get a traditional mortgage.

You shouldn’t have a problem getting a loan from a traditional lender (lendingtree to get a bunch of people to reply).

Getting an LLC will protect your personal assets against a tenant slip-and-fall type deal.

You said you have $10k to put down. Most lenders want at LEAST 20% so you’re only going to be able to get something in the $50k range which means your not likely to be able to buy a duplex.

What area are you looking at?

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