Start Big or Start Small?
All first-time landlords have a learning curve and it's easy to make mistakes during this period. Since it takes more skill to manage a multiunit building, buying a duplex gives you more opportunities to make errors. In addition, managing multiple units is a full-time job, not something that can be handled after a regular workday. The potential for you to burn out and give up will be greater if you try to take on too much. So if you're thinking of land-lording in your spare time, get a small duplex to start off. It will be easier to learn the skills you need and you'll also have an opportunity to build tenant relationships gradually, one tenant at a time.
Find a duplex that has separate utilities for each unit so that your tenant pays his own bills. Then the rent you collect can help you pay off your mortgage and set aside money for repairs. Your tenants will have to deal with the cost of using too much water, setting the thermostat too high, and for gas and electric bills that climb to new heights each year.
Large buildings will be more expensive and, if they have five or more units, require a commercial loan. They also require more money for maintenance and repairs. Most small duplexes are more affordable when you're just starting out, and they're easier to find because there are more of them on the market than larger multifamily buildings.
After you've mastered the learning curve, then you can go out and purchase a building that has six or eight units. When managing that becomes easy, then you can tackle something even larger if that's what you want.
