Owner Occupied Duplex

Intro

The Gate Way to Self-employment

Economics

Living a lower middle class neighborhood

Intro

With housing I would recommend live in something that makes you money. I like small multifamily homes (2-4 units) I live in a duplex renting the other half out. On this page I will talk about my experience with owner occupied duplex etc... The best of both worlds

You get rental income and taxes breaks ... I cover this more below but it just give you a lot tax rate income and you can make your net income look a lot better for taxes than the gross income with this.

I really like a lot of what Gordon Reeder writes I have links to his pages as well as a number of other sites below.

Gordon guide

As a first time home, A student living away from home, A retired couple, A single parent, A grown child with an elderly parent. I did this as a 1st time home owner and then later on as my mom's health declined we moved her into the next door unit to make it easier for her to live on a 1 level home that was smaller and I could also help take care of her too.

The Gate Way to Self-employment

I have a page about self-employment I feel that before one can be fully independent from employers and others they need to create additional revenue streams chef among them being subsiding your own housing.

I bought my duplex in 2018

It is ranch side by side built in the late 1950’s its in a suburban area in eastern Iowa. It has central AC, A full basement for each unit as well as a detached garage.

Put a nice amount of money down then pay the mortgage like you are paying rent and use the rent money to build up reverses and also to pay down the property then you will have your own rental kingdom. With interest rate the way they are today it may make less sense to go into debt to buy up more properties than just having the one. I am also not a big fan of property management and could probable make a higher ROI on another business or website that I create. I have this as my home base and knowing that I will always have a roof over my head that is affordable. I think for most people getting one duplex or so would be enough unless they get tons of joy out of doing this work and are really handy having the one duplex allows for some diversification of revenue and helps lower your cost of living.

Economics

The price I paid for this property is about what a two bedroom one bath home would cost give or take a few thousand dollars. It's a hyper competitive market it took me over 5 years to get this deal in the town that I live in there's under three dozen duplexes so it's a very rare commodity.

My rental has central air high efficiency for utilities only loses about $38 a year to efficiency loss. It grosses 12k by a year $1,000 a month for the other rental unit. Money goes towards paying the property taxes, insurance, and utility costs. I can write off my internet, garbage, various maintenance things and other costs associated with ownership such as part of the property taxes and insurance so that I can live cheaper here than anywhere else. I don't see myself buying more real estate. I feel like this is the right amount and the right property with the homestead bankruptcy exemption with different protections of being an owner occupied property are and then without over investing into particular asset class.

Living a lower middle class neighborhood

I don't mind it I get along well with people in the neighborhood at least a majority of them but it is a poor place to be some of the rentals go for $400 for a two-bedroom apartment so my property is on the high end but I still look more like a lower middle class person then some rich guy swimming it. I also like that it doesn't push you to keep up with the Joneses a lot of people have this competitive consumerism that just sucks their money dry and I don't feel that I compete with anybody in the neighborhood and I don't want them to try to compete with me we just leave each other alone and don't focus on the material things as much. The neighborhood I grew up was very upper middle class the house were custom built people would redo their kitchens every few years their carpet their paint their you name it it was already done I don't want to live in that type of environment of waste and excess.

Lower your Taxes

Taxes you don't pay

FICA so you don't pay social security tax on it so you get to keep more of your money since it's considered a passive income and taxed at a lower rate than earned income. Always contest a property tax hike I did an oral meeting it took 10 minutes or so and it knocked my property value down instead of it going up 40K it only went up 14K.

There's a number of other cost to add in the vacancy rate. Nationally. It looks like it's 6.8% in Iowa. It's around 8.6

repair cost etc

Yearly cost

property taxes

are about $3,000 a year. Half of that can be written off since it's a rental unit so my net property taxes are $1500 I use the parks and the library more than that amount so I am getting good value there :) $250 a month I contest my taxes every time they try to raise them.

Property insurance

Property insurance is $1500 a year so $740 can be written off

Internet

$900 a year

a month $75 it pulls on the 18th of each month I would say the whole amount can be because I can use the internet off of my phone

Phone

$324 a year

A month $27 October of each year I write this number off and pay $30 a year for a repocket backup phone

Trash removal

trash $232 a year

$58.50 every 3 months $19.50 monthly

Water Bill $420 a year

Or $35 a month

Electric Bill

Estimated budget payment is $73.00. X 12 months = $876

Yearly cost of $876 now vs $636 in 2021 so $240 increase in 2 years!!!!

Water Bill $420 a year

Or $35 a month

Gas bill on budget billing

$28 a month x 12 months = $336 a year

misc. cost

Pest control $80 a year

Arborist $100 every other year or $50

City license for rental $40

landlord association $100 a year

$270 / 12 = $22.50

Yearly fixed cost $7K

$7k a year /12 months = $583 a month cost to keep the duplex going. Getting 1K for the other unit so you can save up some of the for repairs maintine and other cost but use it for other things that you would need to so you got 5K to work with or so each year out of the 12k you get in rent.

Keep a few grand as as reserve I would say as low as two grand. Maybe 5k things can get pretty expensive pretty quick though with owning property.

https://www.fortunebuilders.com/rental-property-investment/

Links

https://www.kiavi.com/blog/rental-property-expenses

https://frugalberry.com/buy-a-duplex-for-low-cost-living/

https://web.archive.org/web/20190202034401/https://plantingourpennies.com/how-we-bought-a-50k-duplex-part-1/

http://www.maclennaninvestments.com/2012/01/24/why-young-professionals-should-buy-a-duplex-triplex-or-fourplex/

https://mymortgageinsider.com/multi-unit-properties

https://www.thepennyhoarder.com/make-money/side-gigs/should-you-buy-a-duplex/

Free Landlord Wifi

https://askleo.com/is-wi-fi-provided-by-my-landlord-safe/

The (Rock Star) Benefits Of Buying A Duplex

https://www.biblemoneymatters.com/the-rock-star-benefits-of-buying-a-duplex/

https://retireby40.org/house-hacking-by-living-in-duplex/

How Buying a Duplex Saved me $50,000 in 5 Years (Case Study)

https://onlinesellingexperiment.com/buying-a-duplex/

https://www.avvo.com/legal-answers/can-bankruptcy-court-take-the-duplex-i-own-and-liv-3811535.html

https://ttlc.intuit.com/community/business-taxes/discussion/is-owning-a-duplex-and-renting-out-half-considered-operating-a-business/00/374797/amp

https://www.fortunebuilders.com/investing-in-duplexes/

https://francoisetmoi.com/interiors/i-am-landlord-what-to-look-for-when-buying-a-duplex/

https://www.moneyunder30.com/multi-family-homes/

https://duplexsandiego.com/7-reasons-to-live-in-your-next-duplex-triplex-fourplex/

https://forum.earlyretirementextreme.com/viewtopic.php?t=6909

https://www.newwestern.com/blog/should-i-buy-a-duplex/

https://everythinghousehacking.com/house-hacking-duplex/

https://after50finances.com/home/pros-and-cons-of-owning-duplex/

https://budgetgirl.com/duplex-diaries-2/

Gordon Reeder Links

I've been asked the question "Who should consider buying a duplex?" The answer to that question is: Everyone. More to the point, we should ask the question: Why should you buy a duplex? There are a number of situations where you would want to consider this.

http://myplace.frontier.com/~g_reeder/Content/who_should_buy_duplex.htm

If you have elderly parents who are independent but may need living assistance, you will find that an asymmetrical duplex provides a unique solution. An asymmetrical duplex is one where one unit is larger than the other. While you live in the larger unit, your elderly parents live in the smaller unit. There, they can maintain their privacy and have their own life. You are close enough to check in on them. Since you are the landlord, the maintenance responsibilities are yours, freeing them of the need and expense of maintaining a house

More complex taxes: You will need to keep records so that you can fill out form 4562 (Depreciation) and Schedule E (Supplemental income or Loss).

http://myplace.frontier.com/~g_reeder/Content/Home1.htm

http://myplace.frontier.com/~g_reeder/Content/how_to_buy_a_duplex.htm

It's really not that hard to make money in real estate

http://myplace.frontier.com/~g_reeder/Content/How_to_make_money.htm

http://myplace.frontier.com/~g_reeder/Content/Recordkeeping.htm