ROOKIE! Would you ever buy a duplex that was just breaking even?

[Kristin Riker]

VERY GREEN (bought my house in 2016, sold July 2022 moved back in with my parents, netted a very nice profit.

My offer was accepted on a DUPLEX in a popular town close by.  Great rental area, both tenants are looking to stay.

House price: $650,000

Down Payment: and is $165,000 (25%)

Taxes: $16,900

Current Rental Income: $4350 (both units)

If I raise rent on both units by $100 each I will be 'breaking even'.  Tennants pay for all utilities.

This house needs some TLC. From what it looks like it needs to be cleaned up (power wash, minor landscape) from the outside and EVENTUALLY I would like to renovate the units.

My question is, is it worth it to purchase this home with the tenants paying the mortgage and taxes (no cash flow) knowing that with renovations I can increase the value of this home.  I'm looking to hang on to the house for a long time, not a quick flip.

[Sergey A. Petrov]

Mortgage and taxes is just the start. You have maintenance, vacancies, management fees, insurance, and a handful of other expenses. With that said, there is investing for cash flow and there is investing for appreciation. Weigh both and see if at least one aligns with your overall goals and plans. You may cash flow $1k/year with zero appreciation or appreciate $10k/year with zero cash flow