Sweet Spot in Picking an Apartment or Duplex for Investment

by Ernesto R. Martin

As mentioned, I've found that apartments/condos somewhere in the $200,000 to $350,000 range and duplexes in the range of $400,000 - $550,000 (in 2022 $300,000 - $450,000 for condos and $550,00 - $700,000 for duplexes) is the sweet spot for good returns without excessive hassles. My target is for the net income to be in the 4% to 6% range. Choose a cheaper unit, like an apartment for $100,000, and the income may seem superior, but the advantage fades when you consider other factors: the properties (and their tenants) have greater delinquency, more frequent need of repairs, and greater turn-over -- things I try to eliminate -- but perhaps nore importantly, these units are typically in neighborhoods with much less appreciation. At the other extreme, apartments over $500,000 tend to have lower net income; althought they can be rented for more money, the condo maintenance fees and property taxes are disproportionally higher.