Thoughts on buying a duplex?

[Goldy]

I found a neat little duplex that I am mulling over the idea of buying and renting out. The duplex is selling for 114k but I think I could get it down to 10k but for the sake of this argument lets say its 114k. Our downpayment would be in the range of 25k.

My info:

25/26 Married with a combined income of 140k, we both work for the same company in the mining sector so stability is so/so but we survived the recent downturn when 14,000 other workers were laid off.

We each contribute 10% to the 401k which is matched at 6% and we also get a 6% profit sharing. We also max out our Roths each year so we are saving something like 29% each for retirement.

Right now we are renting for 650 a month and houses in the area go for 2-400k.

Other payments
415 student loan/mo
0% car loan at 360
300 for food
200 for utilities


So, this duplex can be rented at probably 500 and 700 per unit but we were thinking about keeping the smaller half as a weekend place. We also want to use a property manager which would be about 100 bucks a month.



Do you think this is a smart investment? I am pretty sure you are going to need more info to make a call but I am drawing a blank.

[cptacek]

So you want to buy a duplex, live in one side during the week and then vacation in the other side on the weekends? That sounds silly to me.

But, the payment would be around $1200 a month? Then rent out to someone else for $500 would mean you are paying $700 a month, just a bit over your current rent. This scenario could be good.

[Goldy]

Oh, actually I will still be renting my place since the duplex is 2 hours from my work.

[maat55]

How would a job loss affect your finances?
How much EF do you have after the 25k down payment?

I would never pay market value for an rental or any investment purchase. I would likely not exceed 75% of market value.

[Ima saver]

My In laws built a duplex and rented out one side and lived in the other side. They were very sorry they did. Even tho they lived on the other side and had what they thought were great tenants, the tenants trashed the place after they moved out 3 years later. Now, it just sits empty on the one side.