Re: Buying a duplex to live in and rent out. - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on September 24, 2003 at 17:03:54:
This is probably a bad idea. There are some parts of the country where this would be a good idea, but you indicate you are in the Los Angeles area. There is likely is not a good idea.
In Costal California the prices of properties are very high. However, the rents you can charge are not commensurately high. Thus, you would likely find yourself having to pay more each month to own the property than the cost of the one unit in which you would live. You would have to pay the bank each month for the privilege of having a renter.
You might well be better off to buy a condominium, if you want to live in a multi-unit property. There may be some duplexes that are already condos. If so, you might find that you are better off buying just one unit and letting somebody else own the other unit.
Now, there are some economic advantages of owning rental property beside the cash flow. One is the potential appreciation, the other is the tax benefits. If you want these benefits, you will want to own rental property. However, probably not in Coastal California. If you want to own rental properties, you probably will have to buy in the eastern part of the state or out of state. In the eastern part of CA you should get positive cash flow and appreciation. Plus tax benefits. In other states you might get even higher cash flow than in non-coastal California. You probably will get little appreciation and your tax benefits should be similar to what you would get in non-coastal California.
Good Investing**Ron Starr