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500k single home, nice neighborhood.
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500k duplex, ok neighborhood.
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3 166k condos. shithole neighborhood. errr up and coming.
with the little to no info given id take the duplex… we are late cycle for real estate markets in general and the rental income on the duplex will help service the mortgage and let you hold longer if markets cause you to struggle. (assuming you want to live in a portion of it & not rent them both) also due to the fact that renting in that range the tenants generally will be less likely to destroy your place (as opposed to crappy condos that could get trashed & you could ease your way into being a slumlord/evictions/lawsuits etc)
unless your blackstone & buying a ton & securitizing the rent or in an area with rapidly inflating housing values the single home in a nice neighborhood is probably the worst investment since home values are relatively high right now and any sputtering of the economy can hurt aspirational buyers ability to ger credit/down payments needed to buy those homes & keep prices rising.
What is the annual maintenance on the three? How big is the front and backyard on the single home? I wouldn’t want to spend 2-3 hours mowing the yard when the 2-3 hours could be spent on the golf course.
no intention to buy atm or live in whatever property i buy in future. im just curious which characteristics are best for ivnestmnet properties. ie diversification. quality of tenants. turnover. maintenance. etc etc. if quality of neighborhood plays a difference. price appreciation. etc etc.
if you had to guess the annual expense for each type, what percentage of total price of home would you guess?
like i know condos are 100 bps more expensive in rates. hoa rates can be 1% to 2%. is hoa like maintenance for a single home or is it like on top of it.
property taxes are like 1% for all typically.
hoa & condo fees are really dependent on the individual associations really and you have to look at what exactly they provide - some provide very minimal benefit for a ton of money and some provide plenty of services (lawn care etc) for reasonable prices. its hard to get an apples to apples comparison in my opinion as each is so different
Hmmm…between #1 and #2…they’re the same price…
#1 - I get my own houseand my own yard in a nice neighborhood.
#2 - I have to share a house with a dividing wall with a neighbor. I also share in all of his structural/mechanical problems. I have to share a portch and a yard. And it’s in an “okay” neigborhood.
I’ll have to get back with you.
edit - I just realized that this is for investment, not your personal residence.
In that case, I pick none of the above. Private real estate blows.
do they all attain the same rent? that is a major consideration. if the 500k detached yields $10k per year but the condos yield $50k, that’s very different. if rent is the same, go with the single unit. less work finding tenants, less chance of damage given the neighborhood, house probably needs less upkeep as nice neighborhoods have new/updated homes.
This is totally dependent on the return outlook for the local market and the relative valuation. Nobody would pick the condo unless they expected higher returns due to the heightened risk.
Here is the answer to your question:
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More diversification is better
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Higher quality tenants are better
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Lower maintenance costs are better
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Better quality neighborhoods are better
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Higher price appreciation is better
Lol, maybe I’m just missing something 
but if he is buying & renting he can likely rent to each of the individual tenants in the duplex @ a higher rate than 1 in a whole house. He also wouldnt have to carry the entire mortgage if a tenant leaves which provides some diversification benefit for the duplex
even if you were going to live there if you were to buy & rent to some person @ say 60% of your mortgage/expenses on the property you are ahead while sacrificing some space so i dont think its that simple.
^Yeah. I edited my original post.
The duplex is probably better than the single family home of the same cost. Your potential renters are people who cannot afford to buy a house, so there will be a broader market. Also, if one unit is vacant, you will still get half rent.
If you want to become a slum lord with the shitty units, you can potentially make more money. However, based on my observation, it doesn’t seem worth it. Your tenants will be crappy, more likely to default, mess up the place, or cause other issues. Someone I know had to evict the tenant, who was subletting a small apartment to like 10 Puerto Rican guys. This takes time and money, and is very stressful. Another guy I know asked his muscular friend to help him collect late rent - I’m not sure if this was necessary, but the fact that he thought he had to do this says something about the sort of environment.
from my experience. which is extremely limited. lol. allright which #1, #2, or #3!
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single family dwelling least rent. least diversification. better quality tenant. i m down to live here.
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duplex. better rent. more diversification. but its extremely crowded. parking is a beech. sort of ok to live here.
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condo. best rent. most diversification. i dont want to live here.
when i shopped for a houes a whle back in 2012. it was the market bottom. so condos had the best price appreciation/rental increase and rental yields. but they looked distressed/scary. so i avoided them. plus people told me to avoid condos because their prices crash a lot. but because they crashed a lot, they were actually the best investments. everyone said single family was most stable, it was more stable though, esp cuz it didnt appreciate as much. lol. anywho. i feel duplex might be the best thing!
but im not sure on any costs associated with it. i know there is no hoa, which is fantastic. you can cut it up to 2 different lots if u really want. and lock in seperate mortgages. plus these homes are much newer than the single family. still unsure on the rates, i think they still fuck you there.
honestly in terms of investment im not sure its a great time now to begin with - rising rates seem to be rushing people into buying sooner rather than later (as did the recent tax legislation) and im not so sure thats the environment you want to be buying into - we are looking late cycle on the general market and real estate specifically. obviously real estate is so market/sub market driven that i can only give you general high level national stuff really.
sounds like you could use Trump University
Hehe.
And what’s with all this duplex talk? I didn’t know duplexes were even still a thing?
#2 - You get some diversification via two tenants (vs. one in the single family) and thus your rent roll might be better. If you’re near decent transportation this is a big plus since parking can be an issue.
#3 - I personally like this one the best, but that’s because I’m OK with lower tier properties or even being a slumlord. It’s all about tenant management because as someone else said you don’t want to have to deal with evictions (especially in places like CA, NY, etc…) or high capex costs. Affordable product is getting really tough to come by and so you shouldn’t have much vacancy. This also means you can probably grow rents faster. Of course, depends on the geography. Done right, mobile home cash on cash yields can far exceed any other housing product.
idk if they still get built, but they are still around. could also be talking about those places ive seen popping up all around that have a townhouse style thing on the top with 2 floors & the bottom level/basement is an apartment to generate rental income - so maybe not the “traditional” duplex we think of but something similar
yay- not shopping. just prepping and studying. i know shits expensive. for instance:
i was just looking at apartment complexes. like price history/rent history. its crazy. some are selling for 5m now, but were selling at 2m in 2013. frackkkkkkk. so those fuckers made a killing.
in terms of rent $$, at what point will the level of shit tenants disappear. 1k rent? 2k rent? 3k rent?
duplexes are usually better. a 5.9 IMBD rating and a $20M loss can’t be wrong.
tapping in to this:
debating a condo in the city and not sure if i should split the equity and do a 1br investment property & a 1br property for myself to use, or just get a more expensive 2br property. 2 1br properties would likely total more than the 2br but would be in less ideal locations. interested to hear from anyone who has owned in NYC