First home buyer.. Duplex or triplex? Which is better?

Depends where you live, & what you can afford. Here in Ottawa, duplex's are priced like single family homes, so there's no discount for buying both halves. They're not even for sale at the same time. Maybe it's different where you are?

London Ontario. population of 330,000. Budget is about 250,000$ and under

I vote neither, tenants are a PITA and not worth the hassle.

OilyBob wrote: ↑I vote neither, tenants are a PITA and not worth the hassle.

I want to move out of my parents house.
I don't want to rent.
I want an investment property.
I want to move out of my parents house.

Why not look for a house with a basement suite you can rent out? Or buy a house and rent a room to someone (student)?

As someone who's gone down this road, let me explain why I think I made a mistake:

Five years later, if I were to sell I'd have to recapture those capital gains I made by writing off expenses. Basically meaning I'd be giving the keys back for all the work and sweat I put in the place.

Rent will not "pay off your mortgage". Your rent will be subject to your full income tax bracket. That extra money a year could potentially push you into another tax bracket. Your thousand dollar rent check could potentially become six hundred after taxes.

You can't write off your personal portion of the home. So a 66% write-off at best.

When you are in the position of selling your rental down the road after you marry (hypothetical, but I am in this current boat), your rental will be subject to 100% capital gains from the sale, on top of paying back the losses you wrote off.


My personal belief is that the first 500k of any property sale should be tax free, and anything after that subject to 50% tax. That would also be a lifetime amount. No more house flipping.

However, the way the tax laws are written currently, when I sell my rental I will pay roughly 27% on it's sale, which is vulgar, because combined me and my partner do not have more than 500k in RE assets, but someone in Toronto can sell their multimillion dollar home and not pay a penny of taxes on it.

fuelmizercowboy wrote: ↑As someone who's gone down this road, let me explain why I think I made a mistake:

Five years later, if I were to sell I'd have to recapture those capital gains I made by writing off expenses. Basically meaning I'd be giving the keys back for all the work and sweat I put in the place.

Rent will not "pay off your mortgage". Your rent will be subject to your full income tax bracket. That extra money a year could potentially push you into another tax bracket. Your thousand dollar rent check could potentially become six hundred after taxes.

You can't write off your personal portion of the home. So a 66% write-off at best.

When you are in the position of selling your rental down the road after you marry (hypothetical, but I am in this current boat), your rental will be subject to 100% capital gains from the sale, on top of paying back the losses you wrote off.


My personal belief is that the first 500k of any property sale should be tax free, and anything after that subject to 50% tax. That would also be a lifetime amount. No more house flipping.

However, the way the tax laws are written currently, when I sell my rental I will pay roughly 27% on it's sale, which is vulgar, because combined me and my partner do not have more than 500k in RE assets, but someone in Toronto can sell their multimillion dollar home and not pay a penny of taxes on it.

What kind of math is this?
Someone doesn't understand marginal tax.
Also, maybe you should not have been claiming depreciation on your property all those years. Where did that money go?

Karlhunguss wrote: ↑What kind of math is this?
Someone doesn't understand marginal tax.
Also, maybe you should not have been claiming depreciation on your property all those years. Where did that money go?

I don't think you fully understand his post...

OilyBob wrote: ↑I don't think you fully understand his post...

Yup.

Basically, THINGS CHANGE.

I had this large drawn out plan to get to retirement and use my rental as a permanent "pension".

But things changed along the way. Lower income, separation, etc.

Now I'm stuck in a vicious cycle where I risk losing what I have already, and having nothing to show for all the work, but I continue to sink deeper and deeper.

For the record, sure, I could skip not writing anything off, but then I become cash-flow negative, which is an even MORE dangerous game.

I was recently a first time home buyer as well.

Both my fiancee and I were drawn to go look at a legal triplex in our preferred area. The idea of the renters paying your mortgage sounded oh so appealing.

However, we made sure to talk to people with more experience than us in the area. When talking to those who have rented out space for 10+ years, everyone we talked to seemed to have a horror story. Don't underestimate how bad a bad renter can be. It may be great when you have good people in there, but when you don't, life sucks a little extra. It's a special kind of skill to screen renters effectively. Many of them know how to "play the game."

Additionally for us, we were only looking to stay in the area for about 5 years. It turns out that in our case, buying the triplex would cost about $84k more than something else which would give us similar living space. So, due to the increased buy in price, and the short planned occupancy, the triplex would not have been a good deal.

Honestly, I've got my hands full trying to settle into, and improve my single home. I don't have the capacity / time to deal with the hassle of two renters and their problems.

Be sure to do some calculations, and confirm that taking renters actually puts you far ahead of where you would be with a smaller single home.

What experience do you have with maintaining homes? It is easy to underestimate the time and money required to maintain and improve a home.

That triplex we looked at continues to sit on the market far longer than most homes in the area have....

fix23 wrote: ↑I'm 23 looking into purchasing my first home. I definitely want either a duplex or triplex and have the renters help pay off my mortgage while I live in a section of the house. Which is better? I know triplex means another section but does that mean more profit after taxes and all that?
I'm very new to this and hoping some people with experience can offer some input in the duplex/triplex game .

Thanks guys!

Mortgage helpers are the name of the game!

popbottle wrote: ↑Exactly. In addition, in Canada, things are steady, this isn't Asia. Its c̶o̶m̶m̶o̶n̶ stupid to rent out properties with a bit of loss each month.

Fixed that for you.

First rule of real estate investment, ALWAYS be cash flow positive.

fix23 wrote: ↑I'm 23 looking into purchasing my first home. I definitely want either a duplex or triplex and have the renters help pay off my mortgage while I live in a section of the house. Which is better? I know triplex means another section but does that mean more profit after taxes and all that?
I'm very new to this and hoping some people with experience can offer some input in the duplex/triplex game .

Thanks guys!

Exactly. In addition, in Canada, things are steady, this isn't Asia. Its common to rent out properties with a bit of loss each month.