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Updated over 10 years ago on . Most recent reply

User Stats

21
Posts
5
Votes
Kate Stallmann
  • North Conway, NH
5
Votes |
21
Posts

Duplex Deal

Kate Stallmann
  • North Conway, NH
Posted

Hello BP,

I currently own a 2/2 condo in a good 4 season vacation town in NH.  This is my primary residence.  

Since discovering BP I have been thinking (some might say obsessing) about RE as a way to build long term income.  My husband is reluctant, but we looked at a duplex today that he's jazzed about,  which would be the first hurdle to buying something. 

My plan would be to buy the duplex under a consumer loan,  live in one side,  rent the other,  and use the condo as a vacation rental, which will conservatively cashflow about $235/month.  

($100/night with 25% vacancy = $2100/month ÷ 50% $1050/month. Subtract $815 which is what I pay for mortgage, taxes, and HOA dues, leaves $235).

I was planning to start seriously looking next year, since I am finishing up paying off all debt except the mortgage.  I happened to meet the people who are selling this duplex, and they are desperate to sell, they don't like being landlords and are tired of the hassle. 

This duplex doesn't meet the 2% role, rent would be between $1000-$1200 per unit and they are asking $200,000.  So 1 to 1.4%.  Tax is $6000 per year.  Before we get too deeply into the specifics, should I just walk away because of the numbers?  I am new at this and can't afford to make a huge, expensive mistake. 

Thanks for reading this far, and for any advice! 

Most Popular Reply

User Stats

40
Posts
29
Votes
Josh Birrell
  • Real Estate Agent
  • West Kingston, RI
29
Votes |
40
Posts
Josh Birrell
  • Real Estate Agent
  • West Kingston, RI
Replied

Hi Kate,

I own a 2/2 vacation condo in North Conway and am curious where yours is.  Based on the location I could probably give you a good idea of whether your vacancy and rental rates are reasonable.   Also, I've found there are a lot more costs involved in vacation rentals than you might think such as supplies, maintenance( people do not treat your home like you do) utilities, advertising, credit card charges, etc.  You might be surprised how quickly they add up.   I own a duplex in RI as well and the vacation condo is far more work for less profit.  You may find it just as profitable to rent your condo long term with less hassle.

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