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Updated over 16 years ago,
Understanding how to analyze a SFR vs. Duplex
I recently saw a SFR and a duplex for sale. Both had similar asking prices with similar gross rents. I was a little confused, however, when trying to analyze both deals, as the SFR seemed to be significantly better than the duplex. The following are basic numbers for the purpose of easy calculation:
Single Family
PRICE: $30,000
RENT: $650
NOI: $325
30 years at 6%: $179 P & I
CASH FLOW: $146
Duplex
PRICE: 30,000
RENT 1: $325:
RENT 2 $325
30 years at 6%: $179 P & I
CASH FLOW: $146 ($73 per door)
So, what does a scenario like this indicate? Could someone explain how/why the SFR would be a better deal, or am I approaching this scenario from the wrong perspective?
Thanks!
Fred