Duplex, cash or finance, or stock market?

[Mitch B.]

I've got a generous older family member that wants to step away from a 100% owned 30 yr old duplex & deed it over to myself & my 2 siblings. I'm trying to determine whether to sell it & invest my third in an index fund or buying my siblings out & becoming a landlord .

I running a 10 year model here.

Approx value is $200K

Annual rent from both sides combined, brings in $15,200 net, annually after all expenses ( Ins/Property Tax/Maint/95% occupancy rate)

Ok - here are the factors if I buy my siblings out:

- Do I use cash? If so I lose 9% earning power of that same $ in an index fund.

- If I get a loan ( which will be tricky since there is no mortgage, or at least a loan where I can deduct interest), the cost of $ is kinda steep on a $135K note

- Duplex is fully depreciated so recapture tax will be steep when I eventually sell it.( I would inherit the same tax position of my generous family member ) Also means I wouldn't be able to take any depreciation.

- Duplex will need $35K (approx & is a cash layout) for rehab.

When I run the numbers over 10 years it seems i would be barely ahead to keep the duplex vs. investing my cash outlay over 10 years at 9% in an index fund. This seems weird since I am getting 33% of the property for free.

My concern is my spreadsheet is missing factors. Is there a standard/favorite app/spreadsheet/site that compares investing your cash into rental property vs. stock market at an assumed rate of return?

Many thanks,

MB