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In my neighborhood, there are quite a lot of duplexes and I often see them up for lease by the realtors that farm our neighborhood. I see their signs up for what seems like a couple of months in quite a lot of cases.
This seems like it would be unacceptable to me as a duplex owner. So it has me wondering if there is an opportunity here to approach the owners about a performance master lease where I would impress on the owner that I have more incentive to try harder.
I don’t know much about duplexes. Is there a key difference that a master leaser should be aware of? I presume I would just market mostly as usual. Maybe I’d knock on doors and get to know the existing duplex tenants and find out what drew them to these properties.
Anyone have any thoughts?
I’m running out of time to get my pass to Panama. 🙂
The only difficulty I’ve heard about with duplexes is collusion between the tenants. Let’s say your original ideas to rent the space for $1000 a month but 30 days goes by with no tenant so you discount the rent to $800. At some point or another, the two tenants talk and it gets revealed that one of them is receiving discounted rent. When the time comes for renewal, the tenant paying $1000 a month now wants to pay $800 a month and throws off your cash flow.
Another idea would be to put a master tenant on one side leave the other side vacant to rent out on short-term air B&B rental. Have the MMT administer the short-term (that would require a lot of screening and trust, however).
Yeah, the collusion effect is something you don’t deal with with single-family houses unless you own many on the same street.
In the case I’m talking about, there is only one side coming up for lease at a time and I’d be trying to get that side under master lease. It bears considering that you might not be able to get just one side.
Your idea or one similar could be interesting if you controlled both sides. A lot of people buy a duplex so that they can live in one side and manage the other and then trade up eventually.
Bill
It will work. Sounds like many of these units are rentals, so it may make sense to send a mailing to the area to get to the owners long before the real estate agents do. Can you put signs up on weekends? ” I will Rent Your House Today” or something like that.
Unless there are good schools close by and easy access to streets to get to work, you may not attract the best tenants who stay a long time. However….
I own some zero lot line houses in Dallas. There is a community swimming pool. I do have HOA fees but they are only $70 a month and that includes all yard work, sprinkler repair, and painting the house every 3 years. This area is appealing to hard working singles (mostly cisco employees) , single women, and retired couples who all appreciate NO YARD WORK! Not many kids in the neighborhood. The tenants pay on time like clockwork and stay a long time.
You don’t want to go in to an area with a lot of Section 8 tenants.
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