Duplex and small apartment building investing

Tenants in each unit pay monthly rent. A sale later may bring a gain if the building has gone up in value.

Rent from several units covers the mortgage, taxes, insurance and repairs, and what is left is split among the owners. Several units mean one empty unit hurts less than one empty house.

• Running numbers on rent, expenses and loan costs
• Managing tenants and contractors
• Working well with business partners

• Landlord-tenant, habitability and fair housing laws vary by state and city, so check your local rules
• Buildings with several units may need rental registration, inspections or safety certificates in your city
• Homes built before 1978 may have lead paint disclosure rules, so check federal and state requirements
• If you bring in outside investors who are not active partners, securities rules may apply, so check with a lawyer first
• Older buildings can have costly roof, plumbing or heating problems, so budget for repairs
• Partnership disputes are a common risk, so put everything in writing
• Talk to a CPA about taxes. This is not financial advice

Startup costs are typically estimated at around $60,000 to $250,000, depending on the building, your share with partners and your area. Older buildings can have costly roof, plumbing or heating problems, so budget for repairs.

Monthly revenue is typically estimated at around $3,000 to $12,000, depending on the number of units, location and vacancies. Plan for at least around 10 hours a week managing upkeep, tenants and contractors.

Check landlord-tenant, habitability and fair housing laws in your state and city, plus any rental registration, inspections or safety certificates. Homes built before 1978 may have lead paint disclosure rules. If you bring in outside investors, check securities rules with a lawyer.