Looking for feedback on duplex deal

[Paul Zofsak]

I came across an individual wanting to sell all his duplexes built in 2009. The asking price per unit is $152900, they rent for $895 a month and property taxes come out to about $2551 per year. I am not sure what insurance will be yet but I am guessing around $1200 -$1500 per year. These are all 3/1.5 units with a small backyard and 4 car driveway. The owners bank is offering guaranteed lending because of the rental history of the units for 11% down at 4.5% interest. It sounds like a great deal to me but I would like to get the BP opinions. However, at this time I am still waiting to hear back about any other expenses incurred by the owner, but based on the loan, taxes, purchase prices, and insurance; what do you all think?

[Roy N.]

@Jeff Cook:

When I purchase a property, the acquisition cost establishes the basis from which I calculate depreciation. In Canada, most rental property is depreciated at 4%/year. I was under the impression that in the U.S.A you used a 27.5 or 40 year life using straight line deprecation?

When if I sell a property for more than it's depreciated value on my books, there is a capital cost recovery. If I sell for less, or write-off the property (fire, etc), then there may be a terminal loss.

I still do not see how the deprecation claimed by the prior owner impacts the amount of depreciation available to me ... unless you assume the real property will sell for less?