New Duplex vs Sing. Fam. - Does one appraise better? Wanting a cash-out refi after

[Lucas Penshorn]

Hello All-

I am considering building either a Duplex (2- 2bed/1baths) or a Single Family home (3bed/2bath) in WI. The appraiser will be going of blueprints/location/comps./etc. for the appraisal prior to breaking ground. I plan to keep either one long-term as a rental and the Duplex would give better cashflow, but how would it appraise compared to a single family residence? Is there a typical valuation difference between the two (i.e. duplexes typically value at 5-10% higher than a single-family in the same lot)?? Budget is identified and I, of course, do not want to leave any money in the deal if possible. I am using private funds and then cash out refi so want the higher appraisal.

Hoping there is somewhat of a common answer to this, but I understand there are a myriad of variables. Thanks in advance!

[Edward Stephens]

@Lucas Penshorn thanks for the question! I'd recommend getting a local real estate agent in the area to provide comps for SFR's and duplexes and give you their boots-on-the-ground opinion of values for each scenario. It's a question that's going to vary by market.

In my opinion, if you have the zoning to build a duplex (R2 zoning), then I would go with that.  The gov’t wants you to use the land you own for it’s highest and best use, and they’ll plan to tax you at the higher R2 rate even if you are building a house there. 

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Best of luck.  Keep us updated.  If you have more specifics to share, I’d be happy to weigh in further on this.