I was going through some year to date profit and loss numbers on my portfolio of long-term properties. I do this every couple of months, it really helps me to know the numbers so I can see if there is anything I need to tighten up and what I should buy more of.
After looking at the numbers on some of my duplexes I was really surprised to see how similar the combined P&L was to most of my single family properties.
|Total Cost vs ARV||72.4%||64.5%|
|Profit after Debt Service|
The numbers look pretty close, don’t they? The problem is: I paid less for the house; I only have to manage one tenant with the house; and in the last cycle they appreciated at pretty much the same pace.
I know I only provided one example, but I have probably analyzed 30-40 duplex in areas I buy and I can almost always achieve a better cap rate with a single family house.
I have no problem buying and managing duplexes, but sometimes investors internally count them as two houses. The numbers are almost never as good as two houses.
What I dislike about duplexes
What I like about duplexes
Disclaimer: I do not own a lot of duplexes or any fourplexes and I do not specialize in managing them.