Posted by camgere on February 26, 2009 at 12:14:30:
The other side of the duplex may or may not subsidize your side. Only half the duplex is a rental expense. It all depends on the numbers.
Purchase Price
Downpayment
Closing costs
Fix up cost
Building value
Occupancy Rate
Rent
Monthly recurring costs:
Mortgage payment (or loan amount, rate and term)
Property taxes
Insurance
Utilities
Gardening
Immediate repairs
Reserve for big repairs
Other
Living next to a tenant makes it a little too easy to complain every time they have a moments exasperation with something. It is hard to maintain a neutral business relationship with the tenant. They either impose on you as a friend or despise you as an enemy. The good news is that you have a good idea of what goes on in your rental.
Any negative cash flow for the entire duplex represents your cost to live there. Positive cash flow would be really nice.