Austin duplex at $545,000 and $1,918/month — does this work?

[SimpleWall]

The 4.2% gross yield is the detail that changed my view of this deal; it sounds acceptable at first, but leaves very little room once debt costs enter the calculation. The property is a four-bedroom Austin duplex offered at $545,000, with expected rent of $1,918 a month.

I have budgeted separately for empty periods, management, ordinary upkeep and a major repair, yet one difficult year could still turn the cash flow negative. Property tax, insurance and turnover are the costs I am least confident about. Which one tends to alter a deal like this most, and what stress test would you run before proceeding? I also need to confirm whether the quoted $1,918 is for the entire duplex or one side, because that would change the outcome completely.

 

[mapTheVale]

At 4.2% gross, I would focus less on choosing a target net yield and more on whether any dependable cash flow remains. Property tax and insurance could be decisive before financing even enters the picture. Is the $1,918 the total rent for both sides of the duplex, and are your tax and insurance figures based on current estimates rather than a percentage rule?

 

[uma.park]

I’d add a caveat: a larger maintenance reserve will not fully capture turnover. Vacancy, cleaning, repairs and management-related leasing costs can arrive together, so treating them as separate independent allowances may be optimistic.

Run the financing at several cost levels, then model one turnover during a year with a significant repair. If that produces negative cash flow you cannot comfortably carry, the specific net-yield target is almost beside the point. The rent figure for the whole duplex versus each unit is the crucial missing detail.