Duplex or Single Family for Income Property

[Kelley Schneider]

So I am faced with a decision to buy a duplex at around $345K in a decent neighborhood... It's not a super desirable neighborhood, but it is a good rental market. The schools are so-so. The duplex has 3 bedrooms (which includes a master with it's own half bathroom). I could probably lease each side of the duplex for about $1100-$1200 a side. I'm assuming about a 3-4% annual increase in value over the next five years and I can probably rent it out fairly quickly.

OR I could get a BEAUTIFUL, well-maintained single family home for $325K, 2900 square feet, 5 bedroom, 4 bath, really desirable neighborhood. It was built in 1972, so it's not brand new and the neighborhood is older--there are also a couple of other rentals in there. I could realistically get about $2200 for the house as it's in a great school zone. The catch is it may take me a bit longer to find a good tenant for this property.

What would you do....

[Bryce Y.]

Neither. You will definitely be losing money if you finance it, and at best making a paltry return if purchased all cash.

I would also never invest for appreciation, but that's just me. If you're just looking for a place to park your money or a tax shelter, then that's a different story, and I can't really give any advice there.

Read up on the 50% rule.