Ignite FB Tracking PixelSmall Investments Can Still Be Profitable - Mike Bowling
Small Investments Can Still Be Profitable

by Mike Bowling 03/24/2019

So, you want to buy a property and offset it with rental income, but a multi-family or apartment complex is a bit too rich for your bank account? No problem! Most of the steady increase in new renters comes from young millennials, and you can cash in on this increase as well by buying just a slightly larger property. Renting out rooms to students, or the other half of a duplex is a great way to supplement your income or offset that larger house purchase you don't completely fill yet.

Some layouts are better for segregating (for privacy) and renting out than others. Look for homes with secondary entrances, guest houses, separate parking, and multiple bathrooms or a finished basement with its own bathroom to ask for the highest rents. Your agent can help you find these properties; they are experts in the needs of potential landlords.

Owning and Renting a Duplex

Duplexes have some significant income advantages, especially for new investors. If you're planning to live in one of the units for at least a year, you'll qualify for FHA loans that can cover over 90 percent of the property value. Additionally, you can rent out the other side to offset your payments. That lets you be both a homeowner and a landlord at the same time, whereas if you were to purchase a single-family home with an FHA loan, you would still have to live in it for a year before renting it out, cutting down on your potential income. The downside of living in and renting out your duplex is proximity. You typically share a wall with your tenants, which means very little is hidden from them, and you're always on call if they need something. 

You can also rent out your duplex to your elderly parents or grown children, which allows you to be together while having separation and privacy.

Being a Landlord

No matter what size your rental property, from a single room to an apartment complex, you are responsible for the property. That means all maintenance, landscaping, upgrades, appliances, emergencies, and anything else that crops up is yours to take care of in a timely manner. Be sure to check your state and local laws for the specific landlord requirements and tenants’ rights in your area.

Next time you make that open house list, be sure to ask about properties good for sharing with a tenant. Your realtor can help!

About the Author

Author
Mike Bowling

 Mike Bowling began his real estate career in 1991. One of the top rated agents in Yuma AZ. Rank as America's Best Real Estates agents in the United States by Real Trend for 2015, 2016, 2017, 2018.

Help-U-Sell® Real Estate is the largest fee-for-service real estate franchise with more than 100 offices serving 26 states and the District of Columbia.

Created in 1976, the Help-U-Sell Real Estate model was the pioneer for providing an alternative to the dated 6% commission structure. We never insist on fees based on a percentage of the sales price, allowing consumers to save thousands of dollars compared to what they would have spent on a traditional broker's fee. Help-U-Sell Real Estate is a full-service, set-fee organization and our licensed professionals manage the entire home sale process from start to finish, including handling all negotiations, providing referrals, showing the seller's home, and providing expert advice and representation. We also help buyers acquire financing, find the best home for them, and negotiate with the sellers.