PATIENCE PAYS – BUYING A DUPLEX IS A TRIPLE WIN INVESTMENT STRATEGY

Disclaimer: Good Day, Readers.  WealthBuildingPowers blog is a financial literacy/competency blog and does not provide specific investment recommendations.  

THREE WINS:

If you are considering buying a home, make sure your search includes the option of a duplex/multi-family unit. I guarantee you by the time you retire; you will be glad you did.  

A duplex can be a triple WIN!

  1. You purchase your first property and cease paying a landlord’s rent. WIN
  2. You simultaneously purchase your first rental property. WIN
  3. When ready, you rent out the unit you live in and buy another property. WIN
  4. WIN -WIN – WIN! Wining so much you get tired of winning!  Nah!

A duplex is a single property with two separate living units and is an excellent first investment, providing a home as well as your first rental investment.    You live in one unit and rent the second unit.  

SOME OF THE ADVANTAGES

YOUR TENANT PAYS THE MAJORITY, MAYBE 100% OF THE MORTGAGE

If you purchased a $500,000 duplex at today’s rate of ~2.25 percent and put down $60,000, your monthly mortgage payment is $1,682.00.  You likely can rent the second portion of your duplex for the entire mortgage amount!  Now you still will have to pay other costs such as taxes, insurance, and your utilities.  However, this plan will put you in your own home for less than you were paying rent!  A WINING solution! And in 30 years, your $80,000 down payment is now worth ~$1.6 Million or 10.5% annually over 30 years. 

MORTGAGE ADVANTAGES 

Mortgage companies consider a duplex as one property and will normally finance the property at the same rate as home property. Mortgage companies typically charge at least one percentage point more for an investment property. Also, when qualifying for a mortgage, the mortgage company often allows you to include part of the potential rent into your income.  For those doing their homework, your tenant may pay the majority of the mortgage.  

TAX ADVANTAGES 

Investing in a duplex as an investment property qualifies you for several additional tax deductions? Whereas single-family homes don’t offer the same tax breaks, duplex owners can deduct most expenses for maintenance, yard work, repairs, utilities, etc. 

OTHER ADVANTAGES

  • It’s easier to keep an eye on your property and tenant 
  • Duplexes for sale are typically located in affordable areas primed for growth, making this an excellent investment for a first-time real estate investor.Cost-wise, you will also benefit from having two units in one transaction. Your building and landscaping costs will be lower per unit compared to two single-family rental units.
  • Property taxes will be lower per unit than compared to two single-family homes of similar square footage.
  • Renting out both units will produce more monthly free cash flow, making owning a duplex potentially very lucrative.

CONCLUSION

When you are on the market for a multifamily unit, ensure your real estate agent has experience locating those units.  Most real estate agents will claim they can sell you the London Bridge.  Find agents who have successfully located and sold multifamily units.  Purchasing a multi-family as your first property is a WIN x 3 scenario.  Do your homework and remember real estate is ALWAYS about location.  You need a safe community and good schools to grow your investment. You should not be thinking about whether a property type is a good investment or not. Instead, you want to think about how well a specific property type will do compared to other properties. It’s all about quality investments, not quantity. 

If you are ever confused about which property seems right for you, just remember that the key is to figure out which property will generate a better long-term return. 

Keep purchasing duplexes or multifamily homes. At the end of 30 years, 2051, your duplex is worth ~$1.6 million in equity after paying off the loan.  Years later, you repeat the process.  As the value of your next multi-family appreciates, at the end of the next 30 years or less, you have another $1.6 + million.  So far, you are up to $3.2 million at about the time you are ready to retire. How many times can you repeat this simple formula?  

Patience and the Power of Compounding! 

YOU MAY ALSO LIKE

STEP #1: BUILDING YOUR “A” REAL ESTATE TEAM!

 

STEP #2: IT’S ALL ABOUT THE LOCATION, SILLY

https://wealthbuildingpowers.com/2020/09/08/its-all-about-the-location-silly/

STEP #3: BUYING THE BEST MONEY-MAKING INVESTMENT RENTAL PROPERTIES
https://wealthbuildingpowers.com/2020/09/21/buying-the-best-money-making-investment-rental-properties/

 

STEP #4: HOW TO FIND A GREAT INVESTMENT PROPERTY REAL ESTATE AGENT!
https://wealthbuildingpowers.com/2020/09/28/to-find-a-great-investment-real-estate-agent-you-simply-need/


REAL ESTATE INVESTMENTS – THE BEST WAY TO BUILD YOUR WEALTH!

HOW TO GROW POSITIVE CASH FLOWS FROM RENTAL PROPERTY INVESTMENTS

 

THE BEST INVESTMENT TO MAKE BY AGE 30 – REAL ESTATE

BE SMART – PLAY MONOPOLY AND LEARN FINANCIAL LITERACY

STEP #8: SUCCESSFUL NEGOTIATIONS IS ALL ABOUT THE NUMBERS

STEP #7: IT’S ALWAYS ABOUT THE NUMBERS!

TO JOIN WEALTHBUILDINGPOWERS.com OR FOLLOW ON LINKEDIN OR TWITTER

Graphical user interface, text

Description automatically generated

PLEASE SIGN UP TO FOLLOW WEALTHBUILDINGPOWERS.com BY PROVIDING YOUR E-MAIL IN THE WORDPRESS BLOG PAGE SUBSCRIBE BOX!

Thank you to my followers and readers for your likes and comments.  All comments, recommendations, and feedback are welcomed and utilized to improve this blog.

INSTAGRAM:  

http://instagram.com/wealth_building_powers

LINKEDIN: 

https://www.linkedin.com/in/styronpowers/

ABOUT ME

I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with aN.C.C. State, Chemical Engineering, University Rutgers, MM.B.A.and Harvard University, Advanced Management education.

I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life.  It is my time to serve and give back.

DISCLAIMER

I started my first business at ~13 years of age (a small but brilliantly created plant nursery). I am a successful investor in stocks, options, real estate and am happy to share my finance and investment lessons.  I am NOT a licensed financial advisor.  Please do not construe my suggestions on this blog as recommendations for your situation. As an investor, you must establish your risk/loss tolerance. Investment in any asset involves risk, including complete loss. 

 Please seek your licensed CC.P.A.or fiduciary financial advisors for individual financial advice.  

I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.

To follow my daily posts on Instagram, CLICK BELOW:

 http://instagram.com/wealth_building_powers

Share this:

 

Powers Investments Management, LLC

This blog will provide, information and simple strategies, that will assist you to achieve YOUR financial objectives and long term targets. For over 30 years, I solved multi-million dollar problems, for Fortune 10-250, companies. My formal education includes: Business, Finance and Chemical Engineering {Problem Solving} at: Harvard, Rutgers and North Carolina State. And an additional 30+ years, managing my family’s investment decisions. I currently manage/advise people with net-worths ranging from the tens of thousands to several million dollars.

You May Also Like

RELAX ALREADY, YES INFLATION IS HIGHER THAN IN THE PAST 13 YEARS, BUT IT’S TRANSITORY!

LET ME GET THIS RIGHT – BROWN PEOPLE ARE TOO STUPID TO BE PROFICIENT AT MATH, READING, AND WRITING? 

CHICAGO’S HARVARD INVESTMENT CLUB EVALUATES – NVIDIA STOCK

BECOMING A MILLIONAIRE BY KISS-ING

Leave a Reply

%d bloggers like this: