in 2019 my spouse and I purchased our first half of a duplex. Its 3 bedroom 1.5 bath on Nantucket. The market on Nantucket is unbelievably expensive. I'm originally from upstate NY. I moved to Nantucket in 2013 and rented until we purchased in 2019. We purchased the first half for 670K (3.375% 30 yr fixed). Appreciation has gone up so much that comps within the last 6 months to a year put our half's value around 1,000,000 to 1,200,000. This past August (2023) the owner of the other half approached us to gage interest in us purchasing the "other side." We ended up closing in November for 1,110,000. We took a HELOC from our original purchase for the DP of the new property, about 180k. These days, the interest rates are so high Heloc is 8.5%, 7/1arm on the new purchase is 6.65%. We feel these high interest rates are a short term issue because, at some point, the interest rates will come down so we will REFI, and the appreciation outperforms (I Think) the current interest rates. We rent the new side and cover our total costs each month (about $7250 total including insurance and taxes for the property) Our ROI for the new side is 7.8% 87,000/1110000 - 0.078
Do we have a Healthy ROI for our original side or for the whole combined property? We live in the first half so no rental income is generated. Combined we make about 200k/yr from our 9-5 jobs.
I feel like there are only a few good opportunities in life (Warren Buffet/Charlie Munger) and this was/is one of them for us.
Is anyone familiar with the Nantucket/Martha's Vineyard Market?
