Is it a good idea to sell my detached single family house and buy a duplex in the city instead?

My current intest rate is 5.625% with a 30 year mortgage, but my house is 2440 sq ft and I live there by myself, it's way too big for me!

Would it be a good idea to sell my house and get a duplex in the city? There is a good market for renters there. I'm planning to spend $300k - $500k and put 20% down. That will get me just about any duplex in my city. However, interest rates are a lot higher now, so my monthly payments will be higher than with my current mortgage.

Typically, a $300k duplex will have units that rent for about $750 each per month, with tennants paying all utilities. A $400k duplex would be about $1000 per unit.

Also, I'm worried that a duplex will appreciate slower than a single family home, and that with a lower rate of appreciation it will not be a good investment.

Any advice on what I should do? If the duplex would increase my net worth by at least an extra $10k per year, I'd feel like it's a good idea, but I'm not sure it can.

I'm more asking investment advice. I'm about 15 minutes outside the city in the suburbs, but I'd enjoy living in the city as it's a pretty social area I'm looking at (lots of young professionals, things to do, etc).

I'm only 28 and don't have any experience with invement propety, so even with the research I've done it's hard to know if I'm making the right decision. I've tried to run the numbers the best I can. My plan would be that if I buy a duplex I would get a 30 year mortgage and keep it, eventually moving and getting another place, but continuing to rent it. I don't want to do that if living in my current house (valued at $360k now) would be just as good of an investment, because I know a duplex would require more effort (finding renters, making repairs, etc).

Would anyone out there who has experience with invement propety make this move, assumming that the lifestyle would be acceptable?

One word of advice is that without specifics, NOBODY here can give you a more specific opinion on your situation.

Depending on your local market, you could be receiving at least $10k increase in value of the duplex. One thing that you will have with the duplex is, you will have more cash flow definitely but you will have more work to do than being a landlord for a house, more expenses, etc, etc. I personally invest in single family homes & townhomes, it's a lot easier for me.

If you decide for the 2plex or 4plex make sure you have sufficient savings to keep you on time with the payments if you are not able to find renters for at least 4-6months.

If you are worried about the interest rate, it would be the same, nobody can tell you what your interest rate will be without specifics. Take into account that eventhough you are getting a higher mortgage payment with a higher interest rate you are also getting a lot of rental income for all the rooms so that will help you cover most of your mortgage payment.

In my opinion if you want to make your life easier, you could use the equity on your current home to move to a smaller house and rent out the big house. The rent could help you pay for most of the mortgage in the big house and you will have less headaches. That's just my opinion.

You are asking two different questions. Your current home is too large, you say and are considering moving into the city. I take it to mean you live in the suburbs, or even farther out. This means you are considering makeing a lifestyle change. That will be a matter of your preference.

If you are asking INVESTMENT advice, then the numbers you have already pulled are the way to make that decision. Best number wins! Is your year-to-year net worth that important to you?

Or is ease of life and net worth at the end of it the most important factors?

If your house it too big, then you are 'consuming too much house' and would save money by finding a smaller living space in the same area. If you move to the city, chances are that you will pay more for this smaller living space because now you are consuming more of the convenience of the city/short commute, etc. That's one decision.

The other decision is whether buying a duplex and renting out half is wise. Being a landlord has its own costs that don't show up on paper (like stress from vacancy, repairs, etc). Run the numbers accounting for you own tolerance for being in the landlord business.