Duplex Case Study

I recently purchased a duplex to live in half and rent out the other half. I am also managing it myself for now. Below is a breakdown of the numbers for the property. You will see that the cash flow for the property is negative and might ask ‘why would you buy it if it had negative cash flow?’ Well… It is a nice property in a good neighborhood, the type of tenants I hope to attract are long term headache free tenants. Also I needed a nice place for my family to live and the total price I am paying after receiving rent is significantly less than what it would have cost to get a place just as nice and the same size so it met my current needs. In addition to this I still have a job so the tax deductions are important to help reduce my taxable income. 

Purchase price: $166,500

Down payment: $8325

Interest Rate: 4.125%

Closing costs: About $1700

Current rent: $750/side $1500/total

Market rent: $850/side $1700/total

Taxes: $4507

Vacancy: $1700

Maintenance/Repairs: $1700

CapEx: $1700

Property management: $1700

Monthly Costs: $1825 including mortgage

Monthly Income: $1700

Monthly Net: -$125
Additional considerations: Mortgage interest deduction and Depreciation
Books that helped me: Who Moved my Cheese, 4 Hour Work Week and one of Robert Kyosaki’s books.
Podcasts I listened to that helped get me started: BiggerPockets, InvestFourMore, CashflowGuys, WheelbarrowProfits and Rental Rookie.
Let me know what you think of my purchase and my analysis of the property.

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