First time buyer: A house or duplex?

[BayCityProgressive]

I am 22 years old. i work full time for SBC and I plan on buying a home next spring. I am looking for some ways to make extra cash i am enrolled in the H & R block tax classes to make some extra money around tax season and I go to college part time as well. Does anyone have any advice about buying a home or a duplex? The advantage to a duplex to me would be the ability to rent half of it out and make most of my mortgage with the rent. I have never been a landlord though.

[phantom power]

1. Depends a lot on the tenant you end up with.

Some tenants are great, others are no end of trouble.

Also, how much do you like doing your own home maintenance? If you're handy with basic home maintenance (and like it), that's a big plus. Otherwise, you will be spending time/money managing plumbers, etc, to handle your tenants' problems for you.

[montanacowboy]

2. Being a landlord is very tough

you have to know your renters - they can cause you grief beyond belief; however, if you get good ones, the extra money is wonderful to help pay your mortgage.

be sure to investigate them up one side and down the other; I say this from a lots of experience.

[movonne]

3. I would think a duplex would be best, because of the income...

[Booster]

4. I've owned rentals for over 20 years and I highly recommend

buying either a duplex, or even better a house with a small house on the property. First rule: NEVER become friends with your tenant for obvious reasons. If they let a month go by without paying rent, start your eviction process cause they will never catch up. If you can, don't rent to people your age (ha) and NEVER rent to a bunch of guys; girls yes, but guys are just trouble. You will never, ever regret buying a house because of the tax breaks. Another thing about buying property with a rental on it is you can write off improvements. Just do it. Good luck.

[BayCityProgressive]

6. Thanks everyone!

I am really looking at going with the duplex option. with my main income and side incomes I will be making about 43K next year and with going to school I think a duplex would just be a good idea for me. I could always get a house a couple of years down the road and rent the entire duplex out as well..

[ironman202]

5. the rent racket is rough going...

but as long as you're willing to shovel someone else's shit it's probably worth it.

[Blue_In_AK]

7. I bought a duplex in 1990...

...my first home purchase, and I have had only family and friends living in the apartment this whole time. I manage to keep the rent low so that they're getting a good deal, but they still end up paying about 3/4 of my mortgage. Also, you get some pretty great write-offs with a rental. I would recommend it, particularly if you know people who can rent from you that you trust.

[Digit]

8. You get better tenants when you are on the premises

They know you will be very closeby, so people who normally might be problematic would not want that.
The plus for tenants is that you would be closeby if a problem should arise.
(I had a triplex for 28 years-go for it)

[Al-CIAda]

9. Duplex all the way.

It is worth the hassle -just think, the tenant is buying your house for you.
Do not worry about not being a LL. You will learn. Look up advice on it.

Later, you can buy a bigger home, and rent out both sides.

Wished I had done this at your age.

[Geoff R. Casavant]

10. Before becoming a landlord

Rent "Pacific Heights" with Michael Keaton and Matthew Modine.

Pretty much all of Landlord/Tenant law in two hours, taken to an extreme.

[LeftyMom]

11. Before you make up your mind

Talk to your local landlords' group and see if you can take a class to find out what you're getting into. Get a NOLO landlord tenant law book for your state and see what the rules are and if you can live with them. It's no subsitute for a lawyer but it'll cut down on calls with questions the receptionist can answer.

Certainly there's money in it, but being a landlord also requires a lot of time sometimes (and other times very little, you're generally either very busy or not busy at all) so with work and school that time commitment might be an issue. If you could juggle an eviction in the rented unit or a big involved repair or some other time waster with work and school I don't see why you shouldn't give it a shot.

You also have to make sure your finances can handle the mortgage for the whole property if you have a lengthy vacancy. Otherwise you might be tempted to rent to the wrong person just to fill the unit and that's almost always something you'll regret.

[Missy Vixen]

12. Just throwing this one out here

Our first home was a townhouse. Have you ever lived in an area in which you are at the mercy of someone else with a connecting wall? If you have a problem with cigarette smoke, excessive noise, those who are engaging in illegal activities, etcetera, you might want to rethink this idea.

We lived the worst case scenario: Our neighbor on the connecting wall took up smoking. She married a heavy smoker. The smoke filled our townhouse as well due to a construction issue when the units were built. Her teenage son started dealing out of their house, so we were treated to a automotive parade in the wee hours of the morning -- "visitors" screeching up to their front door, staying 15 minutes, then speeding off. We ended up buying a house in another city to get away from them. We had rotten neighbors for the first five years we lived here, they finally moved, and now it's peaceful.

Obviously, it would be great to have the ability to evict anyone who caused the above problems, but eviction is a long and expensive process. I absolutely agree with the poster who wrote about obtaining Nolo's literature on landlord/tenant law before making the purchase.

Good luck, whatever you decide! Owning a home of your own offers huge tax advantages it's impossible to get any other way.

Julie

[Oerdin]

13. Single family homes

Appriciate faster on the upside and hold their value better during a down turn. Since you live in the bay area you likely can't afford a house though and you ought to just buy what you can afford and start moving up the property ladder.

[Strelnikov_]

14. I Don't Think Now Is The Time To Buy

Unless you can pay cash.

All signs are that China is going to stop recycling the Wal-Mart money back to us. They need to buy high priced oil.

Once this happens, interest rates go up, real estate bubble goes pop. Between this and the coming oil shock, I am afraid that you would be buying in at the peak.

Of course, if you live in an area where the market is under priced, the exposure from buying would be much less.

[ultraist]

15. It depends on your local market

You may be better off buying a single family home. Look for the best investment, which basically comes down to cost and appreciation rates for that area. Do consider though, that some regions are seeing a bubble and high double digit appreciation rates will not continue.

Look for something that is underactualized, in an upcoming area, you will see higher appreciation rates than you will on a duplex in a stagnant area.

I'm a landlord and while I would not live in the same property as my tenants, managing one unit is a piece of cake. Don't let it intimidate you, but go for the best investment. Check out "as is" properties or rentals that are surrounded by home owner occupied houses. When you see rentals getting phased out, an area that is just starting to get gentrified, you can make excellent returns on your cash. Oftentimes, these properties are on the peripheal of an already established neighborhood.

Someone suggested you attend a local landlord group meeting. I'd highly recommend that, in fact, you may meet a landlord who is selling some properties and get a chance to buy, before it hits the open market. Seasoned landlords will have the best local advice for you.

[MercutioATC]

16. Having been a landlord myself...

...it's not for everybody.

Yes, it can be a great deal financially, but there are definitely headaches that go with it.

Myself, I wouldn't ever live in the same house as one of my tenants...