Property Pros Vs. Cons
Dave talks to James about the pros and cons of purchasing a duplex.
QUESTION: James just got pre-approved to buy property. He decided on a duplex so he could rent the other side out. Is that a good idea?
ANSWER: There are several good and bad things. Your mortgage will be paid by the tenant, if they pay. The tenant is also right next door. The bad thing is … your tenant is right next door. You have to manage the relationship with the tenant very carefully. Another downside to a duplex is they don’t appreciate in value as quickly as a single family unit of the same proportions. It’s a wholesale market and the buyer of the duplex is an investor, who is always looking for a deal.
Also, don’t think landlording is an automatic process. Just because they are breathing doesn’t mean they’ll be the perfect tenants who always pay the bill. Have some boundaries and guidelines.