I've been working out the numbers for buying my first house which will be a duplex investment property. I have the worksheet linked below, am I missing anything? I have about 5 years left before I retire from the military. So far it maths out.
@matfletch Where are you going to find a duplex for 120k that would rent out for $2100? You would be lucky to find a decent single family home for that price. These numbers are unrealistic.
@godsplan That’s what it was thinking too. And at 1000 per month you are going to plan for renters turning over every year or two. The spreadsheet is beautiful. Good luck ever finding a property like that.
@matfletch That is pretty impressive though. I’d make sure you do the math on how much vacancy eats your cash flow. At that rent price I’d expect a bit more vacancy and more damage between renters.
@godsplan The numbers are real for buying price and average rent for the area. I'm buying the duplex from my father who recently inherited it and doesn't want to keep it.
@matfletch I highly recommend you buy a primary residence and learn all the ups and downs of home ownership before you start going down the investor path. The reality shows on TV are not realistic portrayals, and neither are all the Youtubers who brag about house hacking.
@charles15 I'm stationed overseas, so I'm not at a location where I would want to buy a home at. I may end up living in one side of the duplex when I retire or use my VA loan and buy something else. That is too far in the future to decide at this moment in time.
@matfletch You'll need to use conventional financing, and this will be classified as an investment property, so the VA loan will not be an option. This means you'll need 20-25% for the down payment.
@charles15 I figured 20% but if it's 25% it's still not an issue. I knew I couldn't use my VA loan for this. But what I was trying to say above on my next purchase I plan on using a VA loan.
@matfletch Don't forget to add 1-4% of the cost for maintenance per year (I didn't see it in your expenses).
And as others have said that's a crazy rent vs the cost of the house...in my local area I can get a $250k or more home (without a down payment) for a lower payment than you're asking ($2100). Whoever is paying you that much in rent when houses are supposedly that cheap in your area is insane.
@davidolonge Looking at other rentals with 3 bedrooms in the area are renting between $1000-2000/month. The $2000/month are homes in a gated community. I even looked up how much an E-5 with dependents would get BAH in the area and it’s $1278.
@matfletch Knowing that, this sounds like a bit of a risk for you...if you lose the current tenant (which is always a possibility), you may have to drop the rent significantly to find another. Which could mean months of no tenants at all, or a negative cash flow even after you find one (if you have to drop the asking rent, based on the sheet you provided).
