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Items to Consider When Evaluating a Duplex for an Investment

Dustin Edwards • Jul 13, 2022

Duplexes Can Be A Fantastic Investment Option

Duplexes are common properties for new landlords to invest in. Because of the low unit count, there is reduced maintenance cost and an efficiency in management of the tenants. Evaluating a duplex shares many similarities as evaluating an apartment complex, or any other multi unit property. But what should be analyzed to determine if the duplex is a good investment as a rental property?


We invite you to consider a few essential items when looking to invest in a duplex.


Return on Investment (ROI)

When looking for an investment property, regardless of type, the main thing you need to consider is the return on investment or (ROI). Unlike when searching for a home to live in, for an investment property you need to focus on the potential income. Instead of looking at whether or not you like the color of the property or if its location is conveniently near a school, hospital or shopping center, you should consider items such as:


  • How long before I need to redo the siding/stucco of the duplex 
  • How much income the property can provide
  • What key systems (i.e. heating, AC, plumbing, etc) might I have to replace in the next 5 or 10 years


Keep in mind that if you are purchasing an investment property using the Multiple Listing Service (MLS), experienced investors may pass on the purchase at the given listing price. This doesn't mean that it’s not a good property, just that you need to be vigilant when inspecting the property. 


Net Operating Income (NOI)

Sellers have an incentive to report low expenses on the property, however low reported expenses can mean that the seller may have been avoiding major repairs. Be sure to heavily inspect the roof, electrical, plumbing and foundation as these can be some of the more expensive maintenance costs.


The NOI is one of the most important numbers you should look at when searching for a duplex. NOI is the total amount of money earned after expenses with the expectation of interest and principal payments. Some maintenance expenses can be offset to your tenant such as lawn care.


Fair Market Rent

Appropriate rent price can be the difference between vacancies and long term tenants, making it important to gauge the market rent for the area of the duplex. Fair market rent can be determined by investigating surrounding rental options. Communicating with other nearby landlords about how much they are charging tenants for rent on comparable rental properties. Get as many prices as you can, and try to get an average price that should fit within the market.


Duplex as an Asset

For new investors, a duplex can serve two purposes. As you can live in one unit while renting the other, this brings with it a few issues like your tenant living next door and assuming you are available at any time. 


Though generally speaking, unlike a single family house, when you decide to buy a new home, a duplex can provide positive cash flow from both units every month. In the inevitable event that a tenant moves out, rarely will you have both units vacant. 


Maintenance and Management

A duplex usually won’t come with a home owner association (HOA)  or condo fees or guidelines to follow. You can save money by doing maintenance yourself or hiring whomever you see fit for the job. With the property having 2 units, property management can become more cost effective and time efficient. For example lawn care and yard work for both units can be covered as though it were one.


If you have any questions regarding what items you should consider when buying a duplex we invite you to call us at (562) 888-0247 or feel free to fill out our
free rental analysis to see what your rental could yield today.


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By Dustin Edwards 01 May, 2024
Everyone wants to feel safe in their homes. As an investment property owner, it's up to you to decide whether or not to include security measures in your property. Many of the costs associated with the security measures can be included in the rent, meaning not only can you keep your property safe, but you can earn more income in the long run. However, you would still want your tenants to have renters insurance to protect their assets. Today, we’ll discuss the top five security measures you can add to your property and why they're beneficial to you and your tenant. Security Cameras Cameras are probably one of the first security measures people think about when asked about security. Cameras provide more benefits than just surveillance. They provide an extra level of security for the safety of the tenants and their belongings. Additionally, security cameras can be useful when repairs are required. Cameras can aid in supervising repairs and maintenance to ensure you’re receiving the agreed-upon work. During vacancies when the property is empty, security cameras can help keep the property safe from potential intruders. Doorbell cameras are incredibly popular now. They provide the aforementioned safety of a camera that can be accessed remotely, as well as the ability to communicate with visitors. Although one must be careful never to say you're not home, just say you're unavailable to strangers. Security Lights Security lights with motion detectors are another effective tool when adding security measures to your property. These lights brightly if a potential intruder attempts to get near your home. They can provide enough illumination to see the intruder or, at the very least, scare them off. Nowadays, you can find a combination of security cameras and motion-activated security lights, such as the floodlight cam wired plus from Ring . Additionally, because these lights only turn on when motion is detected, they’re more cost-effective than traditional lights with a switch. Illuminate the Property Light generally deters intruders as it's more difficult to hide. Adding lighting to the landscaping can increase the security of the property while creating a relaxing atmosphere. Lights can also be used in other areas of the property to accent features such as trees, benches, or artwork. This can help your property stand out while giving your tenants an additional feeling of safety. Keyless Entry Keyless entry is seen as both a convenience feature and a security feature. They usually use an electronic passcode, biometric data, or grant access through a smartphone app. Physical keys can be lost, stolen, or duplicated. You reduce the risk of unauthorized entry by eliminating the need for a physical key to enter the property. Many keyless entry systems include several features, such as remote locking and monitoring. Although keyless entry is a great new technology for keeping your tenants and properties safe, they’re best used with other security systems. Security Company Nothing beats having an extra pair of eyes on your property for security. This is where security companies like ADT and SimpliSafe come in. While companies may deal with security in varying ways, they aim to protect your investment. While safety is the primary role of a security company, remember that many tenants may be willing to pay more for a premium amenity like a home security company. Keeping your property and tenants safe is incredibly important to the longevity of an investment property. If you’re looking to improve the security of your Long Beach rental property or need help managing your beach city rental property, we invite you to call us today at (562) 888-0247 or fill out our Owner Application online .
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