Duplex Lore and Love: Tell me your investing tales of glory and woe

June 8, 2017 6:57 PM

I want to learn more about first person experiences of people who had bought a house for themselves and then XYZ amount of time later invested extra money/savings in a duplex (or triplex or fourplex). How did it go? How did you do it? Would you do it again or recommend it? note: I'm not really interested in landlording horror stories.
posted by timpanogos to Work & Money (5 answers total)

This is not precisely your question, but the house I bought and now live in was originally built as a single family home and then converted to a duplex. It was much cheaper than single family homes of comparable size in our neighborhood, although that mileage may vary significantly depending on where you live. We had tenants for several years while we lived lean, and thanks to being in a pretty okay neighborhood it worked out well and we were able to offset our mortgage and save up money to do some other things we wanted to do. Now we're in the process of converting the house back to a single family home and modernizing it a bit for our family to live in alone, indefinitely.

The tenants we had in this property are my only experience in a multi-unit building, but I do have some other landlord experience as well, and it is mostly positive overall. I would definitely do it again, and would even consider more units in a building that I might live in or just buy as an investment depending on my needs and local conditions.

However: I and my partner have not only the experience of having been landlords, but we also have the experience and interest in maintenance. And I think that's a big key element of renting properties in an economical way. You can feel free to MeMail me with specific questions, and if anything you ask seems really pertinent to the original question, I can also post it here as a followup so you don't flood the thread with responses.
posted by padraigin at 8:22 PM on June 8, 2017 [3 favorites]

This is not precisely your question, but the house I bought and now live in was originally built as a single family home and then converted to a duplex.

My current house is similar in that it can function as a single family home or part of it can be closed off creating two separate units (with separate entrances, kitchens, etc). I like the flexibility and we have rented both parts of it at different times. (Also, among other things, it is a nice safety net to know that you can, if necessary, live in the small unit and rent the main unit to cover the house's costs.)

If I was buying again tomorrow, I'd be most interested in a well-designed 3- or 4-plex, with a comfortable unit for us and built in rental income from the rest of it.

we also have the experience and interest in maintenance. And I think that's a big key element of renting properties in an economical way.

This matches my experience and what I've seen watching the people I know who are small time landlords. There's a size above which it makes sense to hire out the management, but the margins are often pretty slim and property managers aren't always that great, so being able to do the work yourself may be what makes it work for you.
posted by Dip Flash at 8:43 PM on June 8, 2017 [1 favorite]

I was in the Army in Alaska with a friend. We were young privates with new families and thought we'd buy a piece of property together. We found a place east of Anchorage. It was a duplex. A very simple, white upper/lower box. But it had a nice little pond and a private drive surrounded by a ring of trees that provided a really nice little alcove. We bought it in August, I think. All winter, it was wonderful. He had a balcony, I had sliding glass doors. The view was gorgeous. Our families took turns playing in the snow in the "back yard" which was probably about a 1/5 of an acre and 24 inches deep for months. What we didn't realize was our property was drainage for the surrounding land. We were young and when no one disclosed any problems, we thought we were free and clear. Since then, I've learned (and the law, at least in the lower 48) is you can't buy property without an inspection. Anyway, when the winter snow melted, the pond filled. The water made its way up the gradual and short path to about inch above the threshold of my sliding glass doors. Meanwhile, we discovered the roof had a 1/8th in drop that ran the length of my friend's upstairs ceiling. So he had constant leaking. It - was - a - nightmare. Our wives were pissed. They both went home and took our kids while we stayed and tried to figure our way out of the mess. Eventually, we contacted the agent, took pictures, and wrote the VA asking for help. We remained friend because we knew we both bore responsibility for the mess and there was no use getting upset about it. But, it was a life lesson for sure.
posted by CollectiveMind at 9:42 PM on June 8, 2017 [2 favorites]

Would I do it again? With what I know now, yes. Renting a property I also live in is, I think, the best situation, especially if's no bigger than a 4-plex. Responsible renters is a must and so is thorough screening. The rewards can be generous but having enough cash to handle problems like drainage and sagging roofs in critical. And, of course, a comprehensive inspection beforehand. I wasn't a landlord; we were co-tenant/owners, so I shared the story. It's a doozy I hadn't thought about for years and years.
posted by CollectiveMind at 9:47 PM on June 8, 2017 [1 favorite]

(Would you like fixer-upper contractor scam horror stories? That was a big part of my experience.)

Overall, yes. On our income, it was the only path to homeownership here. But the downsides:
- It's not a very liquid investment. And it's hard to know what it's worth at any given moment.
- There's a lot to learn and do. City, state, and federal taxes and regulations. Other investments are easier.
- It's risky. Fire. Earthquake. Termites. Tenant meth lab turns the place into a biohazard. Tenant breaks their leg on a paver you didn't know was loose.
- Maintenance and management costs.
posted by slidell at 10:21 PM on June 8, 2017 [1 favorite]