Listing and Selling duplexes in Austin, San Antonio and Dallas

         Sean Little, Broker/Owner Austin Lone Star Realty

Phone: (512) 243-7696
Email: info@austinlonestarrealty.com
Main Website: austinlonestarrealty.com


Why New Investors Should Take It Slow

By Robert Irwin

Question: My wife and I would like to buy an investment property, but we aren't sure about how to proceed. What are the pros and cons of purchasing single-family and multifamily rental homes?

-- Mitch, Portland, Ore.

Mitch: If you are unsure about which way to proceed, I assume you are new to real-estate investing. This means there's only one way to proceed: Start small and learn as you go. My suggestion, therefore, is that your first investment be a single-family home.

There are at least three good reasons for this:

1.     It's easier to rent one house than several apartment units. You will need to learn how to evaluate tenants, collect rent and perform other landlord duties. You should find it much easier to handle only one tenant.

2.     There's less cleanup and repair. You will have to do this type of work after every tenant leaves. If you have an eight-unit building, you could be working at these tasks morning, noon and night. With a single unit, if you have a good tenant in a fairly new building that requires little maintenance, such work will be far less burdensome.

3.     Price appreciation tends to be best for single-family homes. Here you get the benefit of any increases in both the investment market and the market for shelter.

Beware of the temptation to buy a duplex (double unit) in which the owner typically lives on one side and rents out the other. Many people see this as an easy way into investment property. But having your tenant living right next door usually is a terrible compromise. You could be over there fixing every little thing that goes wrong. Also, it is almost impossible to find a tenant who will be as quiet, considerate and caring of the property as you would like them to be.

The bottom line: Bite the bullet and get a single-family home.

-- Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Tips and Traps When Renovating Your Home," (McGraw-Hill, 2000).