Will a Seattle area duplex property appreciate more than a condo?

October 18th, 2009 Jacquie Cliff - Real Estate Broker

With prices in the Seattle area low many first time home buyers are coming back to the market to find a property.  The question is whether it is better to buy a heavily discounted condo or buy a duplex property and take advantage of having tenants help pay part of the mortgage.

We all know that over the last two years condo prices have taken a significant hit, while the prices of duplexes have remained more stable.  This would mean to me that as the economy recovers, we will see stronger increases in the condo prices vs. the price of duplex properties.

Does this mean that buying a duplex property instead of a condo is not a good idea?  No, in fact the reduced prices on duplexes makes it a great time to buy.  A quick search of the MLS reveals a good number of duplex properties across King and Snohomish counties all priced in the $200,000 – $300,000 range.  So you can buy more property and still have about the same monthly payment or even have it be a little less depending on your loan!

This does mean more work, but it still gives you a home with a yard instead of a box in the sky, and long term it means that you have control of an income producing property for a very small amount down in comparison to conventional multi-family loans.  In addition to that, but because you now own a rental property, you are in business for yourself which means you can deduct many more things on your taxes.  Find a good CPA or Tax Attorney and ask them what it can do for you!

Would I recommend a duplex over a condo based on straight appreciation?  No, but appreciation is only one factor in evaluating if a property is a good deal.  Too many people got short sighted on that during the boom, and forgot that equity building and cash flow are important too.  For those willing to do a little extra work, I would definitely recommend a duplex over a condo as the property to purchase for a first time home.

Posted in real estate investing | No Comments »

Will a duplex appreciate faster than a condo?

June 5th, 2009 Jacquie Cliff - Real Estate Broker

While researching articles, I came across an old Wall Street Journal article which tried to answer the question ‘Will a duplex appreciate faster than a condo?‘ From my perspective, whether a duplex will appreciate faster than a condominium is not the key issue.

Obviously if you are comparing a duplex to a condo you are going to be occupying one of the units in the duplex.  What becomes important then, is that you are deferring part of your total mortgage payment by renting out the other half of the duplex.  Let’s look at a real world example.

In Everett Washington right now, the average condo price is right around $250,000.  With 10% down that puts your payment at around $1350 per month.  Looking at new duplex properties in Everett, you could probably find one for around $320,000.  Again with 10% down, your payment will come out to be roughly $1726.  So for a little less than $400 a month more, you get a whole extra unit to rent out.

If you live in one half of the duplex, and rent the other out for $1000 per month that would bring your share of the mortgage payment down under $750 a month!  That is cheaper than rent!  The really great part is that because you are going to live in one of the units, you can get regular financing and FHA loans to purchase your property.  This means that you can get into property with as little as 3.5% down.  Plus there is still talk that FHA will allow buyers to use their $8,000 tax credit towards their down payment.  If this is the case, you could be in a duplex for under $5,000 out of pocket.  That is just downright amazing!

I definitely encourage anyone that is wanting to purchase a condo, but that is interested in owning multifamily property, to seriously consider a duplex or even 4-plex to live in! 

If you are ready to make the jump, and purchase a duplex to live in please give me a call at 425-773-3149.  I can definitely help you track down a property that is right for you!

Posted in Duplex, Everett | 1 Comment »