I saw the post the other day from the couple that ended up not earning as much as expected from living in a duplex, I just wanted to add another point as somebody in a similar situation that ended up earning more money than I expected from living in a duplex.
My wife and I purchased a duplex in the Miami/Ft. Lauderdale area in April of last year for 355k with 3.5% down with an FHA loan. We also purchased the building with the plan of living there for about 5 years, saving up for another down payment and then keeping the duplex as a rental.
I purchased the place from an out of state investor from California. There was some deferred maintenance, but in general the place was in really good shape and there was a tenant living in one of the units already. Her lease was up and she wanted to move, but I dropped the rent a little (she was paying $1,700/month and I dropped it to $1,500) and convinced her to stay and then I started fixing the problems. The way it worked out was that the tenant payed $1,500/month and my wife and I paid $1,200/month, plus the water bill and maintenance. I was fine with this arrangement because I was still able to live in a 3/2 for less than we would have been able to otherwise and we planned on raising the rent after we fixed the issues that we knew about.
However, the reason that I ended up making more money than expected was because of my taxes. I just finished talking with my accountant and I'm getting an 11k tax return this year. I'd read about depreciation and being able to claim expenses from rental property on my taxes, but I didn't know that the affect would be that big! We ended up getting back most of what we paid towards the mortgage. Once you consider the rental income collected and the money that we got back on our tax return because of the other side, we ended up paying something like 300/month to live in our half of the duplex.
Now that I know more about it, I'd consider the tax advantages of living in a duplex to be just as important as the rent that is collected!
Submitted April 12, 2021 at 06:13PM by o_safadinho https://ift.tt/3uKz2PQ
