Number breakdown for a owner-occupied Duplex

Multi-Family and Apartment Investing
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Number breakdown for a owner-occupied Duplex

Lindsay Damici
Burlington, VT · Member since 2016 · 19 posts · 6 votes

Hi BiggerPockets Community,

I need some advice. I am currently searching for duplex/multi-family property (I am first-time homebuyer looking in the Burlington, VT area) and I really want to take a close look at the numbers and make sure they work for an investment property. I find myself wanting to spend more money, but I'm not positive if the numbers will work out.

Does anyone have an excel sheet or format they can share that would help me make sure I am taking everything I need into consideration?

I am planning on airbnb(ing) the other half of my home and need to figure out how much I need to make (on a yearly basis) renting out the other half if the home is $250,000, $275,000, $300,000.  My goal would be to have the rental income pay for the entire mortgage and if I make more than estimated that can help with all the other items - I just need to figure out what are my estimated out of pocket costs on a monthly/yearly basis. 

List of items I know I need to account for: 

  • water
  • trash
  • recycling
  • heat
  • internet
  • electric
  • Vermont Gas rental (depending if the unit it rented, but based off of what I have looked at most are - around $17 per unit a month)
  • yearly taxes
  • random repairs/updates/discretionary funds (this # is important for me to know because many of the duplex's in my purchase price range need a decent amount of work done on them)

I just have a feeling I am forgetting something and would love to see how others calculate their costs. 

Thank you!

Lindsay

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Blair Knowles
Real Estate Agent · Burlington, VT · Member since 2015 · 108 posts · 46 votes
10y

@Lindsay Damici have you tried using the bigger pockets calculators? I like them. You can run 5 deals for free w/out going pro. 

https://www.biggerpockets.com/buy-and-hold-calcula...

I think maybe you are leaving out cleaning/turnover fees. Unless you plan to do those yourself? But maybe that is too nit-picky. 

Other than that you may want to look into some other peoples ideas of capX (replacing roofs, furnaces, the big stuff) vs. Maintenance (Calling a plumber, cutting down a tree limb). As well as having a budget for maintenance many BP'ers save 10% of all rents towards capX expenses. Nice to have the cushion for when you need it. Some argue 10% is too much.

And then, last but not least, don't forget that you have to pay taxes on the rental income.  It may go without saying, but your rental income is not straight pocket money. If you are used to W-2 jobs where taxes are already removed this can be a big surprise come April 15th.

That's all I can think of! Since you are budgeting down to the hot water heater rentals it sounds like you have this pretty well planned :) 


Out of curiosity why would you do air bnb over full year rental? Air bnb seems like a much bigger hassle/time suck to me. Also tenant would pay heart and electric for the other unit if it was a year long lease. I haven't really done the numbers on an air bnb rental. Do you think you can make more that way? I'd love to hear about your plan!

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  • Omar Ruiz
    Investor · Anaheim, CA · Member since 2014 · 242 posts · 81 votes
    10y

    you're forgetting the insurance. 

    0Reply
  • Peter Amour
    Investor · Burlington, VT · Member since 2016 · 110 posts · 59 votes
    10y

    insurance will be higher on an air bnb as well .

    0Reply
  • Lindsay Damici
    OP
    Burlington, VT · Member since 2016 · 19 posts · 6 votes
    10y

    @Omar Ruiz @Peter Amour - thanks I realized I forgot to mention Insurance after I posted it and I reached out for a estimated quote.  Thanks Peter for letting me know that I should look into the difference if I want to airbnb. 

    0Reply
  • Blair Knowles
    Real Estate Agent · Burlington, VT · Member since 2015 · 108 posts · 46 votes
    10y

    @Lindsay Damici have you tried using the bigger pockets calculators? I like them. You can run 5 deals for free w/out going pro. 

    https://www.biggerpockets.com/buy-and-hold-calcula...

    I think maybe you are leaving out cleaning/turnover fees. Unless you plan to do those yourself? But maybe that is too nit-picky. 

    Other than that you may want to look into some other peoples ideas of capX (replacing roofs, furnaces, the big stuff) vs. Maintenance (Calling a plumber, cutting down a tree limb). As well as having a budget for maintenance many BP'ers save 10% of all rents towards capX expenses. Nice to have the cushion for when you need it. Some argue 10% is too much.

    And then, last but not least, don't forget that you have to pay taxes on the rental income.  It may go without saying, but your rental income is not straight pocket money. If you are used to W-2 jobs where taxes are already removed this can be a big surprise come April 15th.

    That's all I can think of! Since you are budgeting down to the hot water heater rentals it sounds like you have this pretty well planned :) 


    Out of curiosity why would you do air bnb over full year rental? Air bnb seems like a much bigger hassle/time suck to me. Also tenant would pay heart and electric for the other unit if it was a year long lease. I haven't really done the numbers on an air bnb rental. Do you think you can make more that way? I'd love to hear about your plan!

    1Reply
  • Lindsay Damici
    OP
    Burlington, VT · Member since 2016 · 19 posts · 6 votes
    10y

    Thanks @Blair Knowles I saw their calculators - I think I am going to try that as well. 

    0Reply
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