Bought a $250k Duplex That Cash Flows $2k–$4k a Month… Now What?
I bought a stacked duplex in a major southern city for $250k with 20% down. Comparable lots are worth around $150k, an identical duplex recently sold for $300k, and mine appraises at $285k, so there’s some equity.
Most duplexes nearby sell for $450k–$600k. Mine was cheaper because it’s a roughly 10-year-old shipping-container build.
As a short-term rental, it performs extremely well. It has 6 beds and 4 baths and normally cash flows about $2k per month, with $3k–$4k in strong months. Because my basis is low, I can host large families and groups for 30%–40% less than hotels or competing rentals. Guests genuinely appreciate the value.
The problem is that this property comes with unusual headaches:
• Termites that weren’t caught during the inspection
• Tiny outdoor roaches entering through gaps beneath the building
• An undersized HVAC heating kit
• An inaccessible area beneath the raised structure
I immediately paid a reputable company for termite treatment, and I’m having pest control treat beneath the home and seal entry points. Still, these issues can shut down STR operations and dealing with pests is stressful because the outcome feels less controllable than a normal repair.
Selling or converting to long-term rentals isn’t especially attractive because the neighborhood is rough and tenant quality may be challenging.
This is my third property and the other two operate fairly smoothly. I’m only about two years into real estate, so I’m trying to determine whether this is simply the difficult stabilization phase of an otherwise great investment—or a sign that this property will always be a headache.
Has anyone dealt with a profitable but unusually constructed property like this? I’m trying to get them back up and running but sort of just wanted to put this out there and maybe receive words of wisdom and advice from folks that might have had similar issues or are more experienced than I am (I’m only ~2 years into my real estate endeavors).