Duplex purchase in Portland, OR

[Martine Torres]

Hello!

I received an accepted offer on a duplex in SE Portland, Oregon for the purchase price since it was relisted due to a prior sale fail. The duplex has a new roof but it needs work: new interior and exterior paint, landscaping, new fence, remodeled kitchen and bathroom, new appliances and windows. One side is currently rented. I’m trying to determine if the upfront cost to renovate the unit (I plan on living in the current vacant side and renovating it) will be worth it so I can rent it out for more down the road. This will be my first home I will buy.  

What are your thoughts on buying a duplex as a first property and if it’s worth the cost?

[Steve Milford]

Easy! 

If you think you will kick yourself 1 year from now for not buying it, then it was a good buy. Whatever you get for the rent, will help you pay for the mortgage. I would recommend you live in the half you want to renovate, like you suggested. When the other tenants move out, then rent your side for more and go live on the other side and renovate. Then when you build enough down through savings or refi, do the same thing again.

In the City of Portland, the tenant rules are pretty tight, so you need to be aware of them prior to thinking it is just a simple matter of "I'll just kick out the tenant and rehab the whole thing." It is just a plain ole mess with a bunch of hidden fees pretty much all in favor of the tenant.

Only you will know if it makes sense based on what you have to pay in mortgage costs plus your rehab costs.