Well, things are chugging along. The things that were either wrong or annoying about the place have taken a bit more time to fix but nothing has been a horror story so all in all I am pleased. When they removed the faulty previous renovations to the attic (made into an office and bedroom) I thought there might be a lot of rotting wood because of the way things were stained on the siding outside. But rot was minor. The main focus has been getting that area updated since it was in such poor shape. The corrections to the supports and the installation of skylights really opened up the room and the whole thing has now been blessed by the county inspector (yay! a big relief). This old house was built solidly but out of two by sixes whereas now things would be made out of much bigger lumber - so getting things blessed by structural engineers can be tricky. Currently the work is focused on moving the massive HVAC unit from the sunny front of the house to the shady back of the house, building a false chimney up the outside wall to carry the ductwork upstairs to the home office. This involved cutting new holes into the brick foundation wall and re-working all the ducts throughout the house. The old system was patched and in some places just homeowner done and not efficient. The problem now is that I really want to use as much of the basement as possible as a workshop but getting the duct guys to understand me has been difficult. There are certain rules about how sharp a turn and how many feet a duct can travel and I want as much of the ductwork as possible out of the way which doesn't look like it is feasible. So in order to get from one end of the room to the other I am either going to be stepping over ducts or stooping under them a couple of times. Not what I wanted. Most of the problem is that the HVAC unit that came with the house is monster big (actually a good thing), the previous owner didn't have it ducted the right way so it was unable to cool or heat every room and he used small ducts. My crew is putting in these massive ducts which will do a great job of keeping things ventilated and cool but I will sacrifice workspace down in the basement - so I should shut up and quit complaining. The previous owner has never shown up to finish hauling off his junk. My understanding is that he really fell on hard times financially and just couldn't get it together. I've been piling it up and having the workers add it to their loads to the dump (and I've been paying for that pleasure). In addition to all that - I been fixing up my current house to put it up for sale and things are going s-l-o-w. I had such big plans about really going through everything and tossing out the stuff I don't use or need but that just takes way too much time. I'm down to throwing stuff in boxes and piling them up in the corner and hoping that someday I will be able to go through it. The realtor winced when she saw how much clutter I have (and my house is only a quarter of how cluttered my parents house is) and she suggested I find some newer appliances for the kitchen. She also warned that looking at the numbers I should not expect to get much for the house - so that's a bummer, but things are changing everyday so by the time I have it ready to sell and the new house is ready to move into the situation might be better. You asked for numbers: My final low ball offer was just under $30,000 of the debt owed by the seller (remember I thought I found the actual payoff amount online but I was wrong. So I went in thinking I had the facts when in reality I was way off). This made it a short sale and his lender took about a month to accept my offer and forgive the rest of his loan (remember he was about to foreclose). Then my lender appraised the place at $20,000 less than my low ball offer and I said I would only pay the appraised amount. His bank took one week to accept. The realtor pointed out in the closing that the final price was less than half of the original asking price - so it sounds like I got a great deal but the houses value dropped even further after I bought it. So I got it for a song but if things had drug out for one more month I could have saved another $35,000!!!

Some real good advice in this thread. I'm with the SFH crowd. One thing to think on, if you want to go a bit up-market: If you are near a large educational institution they have visiting lecturers, term profs, visiting experts, etc. If the university is large enough and "prestigious" enough there will be a strata of these visitors who need upscale accommodations. We have a house in Calgary that is used by the university for this purpose. They pay a retainer whether it is used or not (about 80% occupancy) and a daily, weekly or monthly rate depending on length of stay. We have to keep it up, mind you, the place has better furniture, linens, dishes and etc than my personal home, lol. Gardener, cleaning service and nothing tattered or broken or needing attention ever. TVs etc have to be current but its a good way to get a plasma into my home when we installed the LED unit, right? anyway, like running a top end hotel but lucrative by a large factor over plain rentals, if you can get hooked up. We (brother and I) are thinking of getting another one for that purpose.

Since you don't plan to live there for at least a year, the cute, little house would likely be considered an investment property. As such the interest rates on any mortgage will be slightly higher. In terms of capital gains, the two flat is your primary house for the next few years. At least part of the capital gains will not be taxed up to a profit of $250,000. Did you depreciate any of the building for the half you rented? You might owe capital gains on that half of the property. A good tax accountant could answer these questions for you.

bry911…she got lucky? atrocious? You dare to say that? You have absolutely no idea about what you are talking. I said buy the location. The facts are right there in black and white. Boston same home sales have seen an increase of 21.38% above inflation in 10 years. ------------ You are pretending that there is predictable arbitrage in an open market. There simply isn't any dependable way that people can invest in property knowing what the property value will be in 10 years. This just doesn't happen without insider information. The average Joe just can't get that kind of information and doesn't have the liquidity to take advantage of it. I have a former colleague who runs a real estate investment trust out of the Northern Ohio area. He can move around half a billion dollars into real estate deals on a few days notice, there is no way that most people can compete with that. We know that the real estate market is semi-strong form efficient and it tends towards strong form efficient. Prices in the real estate market tend to adjust before things are announced to the public. All the things that are known are priced into the market. Now this doesn't mean that people don't have houses that go up. It just means that you can't buy a house knowing it will go up more than average (which is not that great). You believe that your daughter doing well shows that you can invest in a home and do well because she did. However, Boston went up 21%, if your daughter made a 150% return (adjusting for inflation) then that means that 3 other people lost money or maybe that seven other people saw no increase at all. That is the way statistics work. -------------- There are several reasons that your home shouldn't be considered an investment. Chief among them is that it can lead to really bad home decisions. Homes don't do as well as the stock market, need constant injections of capital and are completely illiquid. A home can be a very good financial decision but just because it is a smart move financially doesn't mean it is an investment. I am 100% for home ownership, I have never said anything about people need to rent. But that doesn't make it an investment. ------------ As for me knowing what I am talking about, I once played a doctor in the school play, so pretty sure that makes me internet qualified to give people investment advice.