Duplex and the 2% rule

[Steven Barnhill]

I have found a duplex that seems to fit the 2% (rent * 50) rule but the actual profit doesn't seem worth the effort.

Asking Price $35K
Total Rent: $750/month

Expenses per year
Taxes: $923
Insurance: $1200 (estimated based on my current rental property insurance)
Debt Service: $4656 (based on a 10 year loan at 6%)

With just the above expenses taken into account, I'm only left with $2221 and that doesn't even include any maintenance for the property. Am I doing something incorrectly?

[Marc Freislinger]

I don't think you're doing anything wrong, but look at the investment without the high debt service.

There's value in paying off the mortgage in 10 years, so don't let the high mortgage trick you into thinking its a bad deal.