Investing in Duplexes & Case Study
Investing in real estate is an attractive option for many, and one of the best ways to start is by investing in multifamily properties. Specifically, today we're going to focus on the opportunities that a duplex can offer. Earlier this week, I listed a turnkey duplex located in Lower Price Hill, Cincinnati, Ohio, for $200,000. If you're unfamiliar with the term "turnkey," it means that the property is ready to be rented out—simply turn the key and find your tenants. In this article, we'll delve into the potential returns you could expect from this investment.
The Property's Condition
This duplex is not just any property; it's a turnkey investment. The house has been recently renovated, featuring a brand-new bathroom, new flooring, and fresh paint. Everything from the roof to the walls has been updated. This means minimal upfront costs for maintenance and repairs, allowing you to focus solely on finding tenants and starting to generate income as soon as possible.
Revenue Potential
The key to any investment is knowing how much money you stand to make, and real estate is no exception. In this duplex, there are two units with different rental potentials:
Unit One
Size and Features: Standard size with basic amenities.
Potential Rent: Approximately $1,000 per month based on size and condition.
Unit Two
Size and Features: Slightly larger, featuring two bedrooms.
Potential Rent: Approximately $1,200 per month.
This brings your total potential monthly income to $2,200, or an annual income of $26,400.
Expenses to Consider
While the revenue potential is attractive, it's important to factor in operating expenses like:
Property Taxes
Insurance
Utilities
Cost-Saving Feature
One of the unique aspects of this duplex is that it lacks common areas, like a shared lobby or garden, which typically require additional maintenance and utility costs. This absence results in some operational cost savings.
Why a Duplex is a Great Starting Point
Investing in a duplex can be a smart way to dip your toes into the real estate market for several reasons:
Ease of Management: Managing two units is easier than managing a larger complex.
Cost-Efficiency: Duplexes are often more affordable than larger multifamily properties.
Financing Options: Smaller properties often have more accessible financing options for first-time investors.
Flexibility: You have the option to live in one unit while renting out the other, which can make the financial burden even lighter.
