You should separate the investment from your personal cash flow to evaluate whether a property is a good deal. If the property generates $1100 a month if both sides of the duplex are leased, apply the 50 percent rule to estimate your free and clear capitalization rate. $1100 x 12 = $13,200 x 0.5 = $6,600, or a 6.6 percent capitalization rate. Leverage 75 percent at 4 percent, and your cash on cash return is theoretically higher. Not much cash flow, though, and some big expenses will wipe that out.
Over time, if you rent out half, you are are going to come out of pocket to meet expenses. With the $200 in added room mate income, you should be able to handle repairs and maintenance without too much stress. I might be cautious about doing this strictly as an investment, but as a way to reduce your cost of living and get into an investment property at historically low owner-occupied interest rates, I would certainly consider this approach. Eventually you can lease out both sides and move into a new property.
I would only do this if my $100k bought a property in a good neighborhood that was in good condition and the area was a strong rental market. I would not buy if the neighborhood was borderline, was deteriorating and/or there was little demand for rentals. And no fixers with those numbers.
