Is Buying Duplex in Bay Area a Good Deal if we are living in it

[Shopitha Kumar]

Hi , I am looking at Duplex in Bay area . Idea is to live in one and rent out the other. So this will be our primary home for next 3-4 year. I have currently found a property that is $1.5M . The Rent on the second unit is $2625 ( The main unit can be rented for $3350 as it is a bigger unit , but we need more space). The Property tax is 1.27% . We are looking at 30 year fixed loan at rate of 2.875% and 7-1 arm is 2.25%. We want to live in this property for only 3-4 years and then move out.  We will be doing the property management ourselves and the property seems to have 5% vacancy loss.  The property is in a decent neighbourhood (Willowglen) with less crime rate. The schools are not that great . 

Would this be a good deal ?

Also how easy is it to sell the Duplex in Bay area ?

[Rick Trivedi]

@Shopitha Kumar - See the example calculations below. Assuming you rent out the smaller unit, you have 4k/month out of pocket.

The good thing is, now that you are a landlord there are several tax benefits that you can leverage to lower your net tax (Happy to discuss offline). In Willow Glen or for that matter anywhere in the bay area, you will pay at least $3-3.5k in rent for 3 bedroom place, if you consider appreciation and tax savings opportunities, all in all it will be more than worth it for you.

We are brokers here local in San Jose, larger SF Bay Area. Happy to help with anything additional you may need.

Estimated payment	$6,602 /mo Property Tax - $1,588 Principle 2200 - Interest $2700
LOAN AMOUNT	$1,200,000
DOWN PAYMENT	$300,000
INTEREST RATE	2.8%
LOAN TERM	30 years
TAXES & INSURANCE INCLUDED?	Yes
PROPERTY TAX	1.3 %/yr
HOMEOWNER'S INSURANCE	$1,000/yr
MORTGAGE INSURANCE	$0/mo
HOA DUES	$0/mo