duplex?!

[bacarolle.livejournal.com]

Hello,

First post here--hello everyone.

My wife and I started renting in Winter Hill about a year and a half ago.
We've grown to love the area and are now considering purchasing a home in Somerville or possibly Medford.

I was wondering if anyone here has experience purchasing a duplex and doing the whole owner-occupied-rent-out-the-other-unit thing.

I've read my fair share of advice online, and I have a co-worker who says it's worked out great for him, but it would be good to get the perspective of fellow Somervillians with experience in this.

Comments

[rmd.livejournal.com]

Yes. Mostly great, occasionally annoying. Get a copy of the Nolo press landlord book.

[ronhaha108.livejournal.com]

Agree 100%, I bought a 2 family in Medford in 2000 right next to Tufts and had nothing but a great experience.

Also agree with the Nolo landlord book, invaluable.

[josephineave.livejournal.com]

I've done it for the past 12 years. Haven't had any problems with the tenants I have chosen (did have to evict the guy I bought it from and his girlfriend). Eviction is expensive around here, if the tenants fight the process (6 months without rent, lawyer, moving & storage, damages), but most don't get into that.

I treat it like a business relationship. Everything is in writing. I provide notice to my tenants when someone needs in to make repairs and make sure I give them the annual interest statements as well as account info on the escrow accounts for deposit/last month.

I've deliberately asked for last & deposit to make sure tenants are on firm financial footing. I try to find them without a rental agency as that gives me more leverage and keeps the cost down for tenants (and me). I do some form of a background check (there are even better options available now).

The important thing is to respond quickly to problems and get things fixed as soon as possible. Pick good, responsible tenants and be very business-like in your dealings.

[smoterh.livejournal.com]

I've done that for past 3 years and so far I haven't had any big problems and it has worked out great. Few things i'd like to point out:
1. Make sure in your planning for purchase your numbers are right this means know the price for which you can rent the place and fully calculate the cost of ownership. For example when calculating your monthly expenditure you need to include rent payment, insurance, taxes, water bills and PMI (if your down payment is less than 20%) and of course a certain amount you can put aside for repairs (5-10% of your rent).

2. Be careful how you screen for tenants, as evictions get pretty expensive. When I search for tenants I host an 'Open House' type thing, where I advertise on the internet and schedule all showings on the same weekend 10 to 15 minutes apart. I found that this saves a lot of hassle but also typically allows you to pick from several applicants at the same time.

[ratushebarl.livejournal.com]

I'm 2 years into a duplex in Somerville, after 13 years owning a duplex elsewhere. Dittoes on Nolo, with the caveat that MA and Boston area and Somerville (and probably Medford) are their own special environments, and Nolo doesn't cover those aspects. You MUST read up on the local stuff and use the local docs. I found this helpful: http://www.gis.net/~groucho/landlord.html

I haven't used an agency; I'd rather make my own decisions about people I'm living under the same roof with, and the smell test has served me well.

Dittoes about keeping it businesslike. I wouldn't rent to anyone where I can't afford to lose the relationship if the business side goes bad. Either choice of "friendship" or "profit" is OK if it works for you, just you want to know in advance which one you're going to choose if push comes to shove.

Double dittoes about watching costs. As far as I can tell, where prices and rents are right now in this area, you mostly don't make money by owning. (I certainly don't, but my house turned out to be a money pit so I wouldn't have anyway.) Not that you shouldn't own anyway if you want to, just sayin' it's not necessarily a profit center.

[somerfriend.livejournal.com]

You might find the $s are a bit better with a 3 family instead of a 2 family. You have to decide what your goals are, the nicest location will probably not be the best $. Rents go with up with a better location, but not as much as purchase price does.

[bacarolle.livejournal.com]

Thanks for all the advice and recommendations.

Based on what i've seen with housing prices/monthly rents, I fully agree with ratushebarl...in all likelihood, renting out one unit isn't going to be a profit center--my original thinking was that it would put a significant dent in the monthly mortgage and related housing expenses. Seems like it won't be more trouble than it's worth, as long as you manage everything professionally.

Also, I'm very glad more than one person has mentioned cutting out the realtor (middleman) to find a tenant...I've always rented directly from owners and it has always worked out very well.

[dahdahdahdancer.livejournal.com]

I purchased a 2-family in Porter Sq a while back and it's worked out well. A landlord has more rights with a 2-family if it's owner occupied (it is!). The rent comes in and I give it to the bank - makes a nice dent in the mortgage payment. I find my tenants on Craigslist by placing an ad with a lot of info in it to help weed out those who might be looking for something different. Then I select maybe 4 who seem like they could be a good fit and tell them that up front - that I'm looking for tenants whose lifestyle is most compatible with my own because the house is my home, too. And I trust my instincts. They all come and look at the place by appointment and I gently "interview" them - their hobbies, work, why they're leaving their last apt, etc. I conduct it sort of like a job interview. For the tenants I select, I give them value for their rent - always upgrading the property, fix anything that breaks promptly, and respect their privacy. Good deal for both of us.