Buying a duplex can be a smart way to build long-term income in Columbus, but the numbers have to work. If you have ever wondered whether a property will truly cash flow after vacancy, taxes, insurance, and a mortgage, you are not alone. The good news is you can use a simple, repeatable process to evaluate any two-unit in Franklin County. In this guide, you will learn the exact steps, formulas, and local inputs to run a clear cash flow analysis, plus a worked example you can copy. Let’s dive in.
Why duplexes work in Columbus
Columbus offers steady rental demand from large employers and a strong university presence. The Ohio State University supports ongoing renter interest around the University District, while employers across health care, finance, logistics, and tech sustain demand throughout the metro. Redevelopment has increased investor attention near downtown and on the Near East Side and in Franklinton.
Neighborhoods with active duplex activity often include the University District, Short North and nearby historic areas, Clintonville edge locations, Olde Towne East, Franklinton and Hilltop, and parts of Linden. Always check current rents and vacancy within a 0.5 to 1 mile radius of your subject property and within the same property type.
The cash flow framework
You can analyze a Columbus duplex with the same structure every time:
- Income: market rent for each unit and any other income.
- Vacancy and credit loss: a realistic allowance.
- Operating expenses: taxes, insurance, utilities, repairs, reserves, management, and fees.
- Net Operating Income (NOI): effective income minus operating expenses.
- Financing: annual mortgage payment.
- Returns: cash flow before tax, cash-on-cash, cap rate, and DSCR.
Use this order to avoid missing a line item and to keep your math consistent across properties.
Step 1: Estimate income
Start with each unit’s market rent based on recent comps, then annualize it. Add other income like laundry, parking, or storage if relevant.
- Formula: Gross Scheduled Rent = sum of unit monthly rents × 12.
- Other Income: add annualized amounts for parking, storage, pet fees, or laundry.
- Gross Scheduled Income (GSI) = Gross Scheduled Rent + Other Income.
Where to find rents: ask your agent for current MLS comps, review Columbus REALTORS market reports, and use HUD Fair Market Rents as a baseline. You can reference the Columbus MSA on the HUD site for context using the HUD Fair Market Rents dataset. Always verify with recent local comps in the same submarket and property type.
Step 2: Factor vacancy and credit loss
Vacancy reduces collected rent and must be baked into your math. For stable Columbus submarkets, many investors model 5 to 10 percent of gross scheduled income. Student-heavy or seasonal submarkets may require a higher assumption.
- Formula: Vacancy Loss = Vacancy Rate × rental portion of GSI.
- Effective Gross Income (EGI) = GSI − Vacancy Loss.
Use the higher end of the range for older properties or if your rent assumptions are aggressive.
Step 3: Build Columbus-specific operating expenses
Operating expenses can make or break cash flow. In Franklin County, focus on the following:
- Property taxes: Ohio assesses real property at 35 percent of market value for tax purposes. Verify the actual bill for your parcel using the Franklin County Auditor parcel search. Rates vary by taxing district, so always use the parcel’s current tax history when you build your pro forma.
- Insurance: budget a landlord dwelling policy and consider liability and loss-of-rent coverage. Premiums can rise for older homes or properties with code issues.
- Utilities: include any owner-paid water, sewer, trash, electric, gas, and common area utilities. If units are separately metered, include only what you pay.
- Maintenance and repairs: a common rule of thumb is 8 to 12 percent of effective income for routine repairs. Older or value-add properties may require 12 to 20 percent.
- Capital expenditures (CapEx): set aside reserves for big-ticket items like roof, HVAC, and appliances. Many owners budget 5 to 10 percent of gross rents, or a per-unit annual number.
- Property management: professional management typically runs 6 to 12 percent of collected rent. If you self-manage, account for your time cost, often modeled as 0 to 6 percent.
- Other costs: licenses, inspections, legal and accounting, advertising, landscaping, snow, and pest control. Review any HOA fees if applicable.
Ohio landlord-tenant law outlines important rules on notices, deposits, and repairs. You can review statewide rights and duties in Ohio Revised Code Chapter 5321. Always confirm whether the City of Columbus or the relevant township has any registration or inspection requirements for your specific duplex.
- Formula: Total Operating Expenses = sum of taxes, insurance, utilities, maintenance, CapEx, management, and other recurring costs.
Step 4: Calculate NOI
Net Operating Income tells you what the property produces before debt and taxes.
- Formula: NOI = EGI − Operating Expenses.
- Interpretation: this is the engine of your investment. Most return metrics flow from NOI.
Step 5: Add financing and debt service
Layer in realistic financing terms. For two-unit properties, you can consider conventional investor loans with 20 to 25 percent down. If you plan to live in one unit, FHA allows low-down-payment financing on duplexes when you occupy a unit as your primary residence. Review the FHA rules in the HUD Single Family Housing Policy Handbook. Some investors use portfolio or DSCR loans that qualify the property based on NOI.
- Formula: Annual Debt Service = monthly principal and interest × 12.
Rates and lender guidelines change often, so get current quotes and an amortization schedule before you finalize your pro forma.
Step 6: Check returns that matter
Now translate the numbers into simple return metrics.
- Cash Flow Before Tax (CFBT) = NOI − Debt Service.
- Cash-on-Cash Return = Annual Cash Flow ÷ Equity Invested.
- Cap Rate = NOI ÷ Purchase Price.
- Debt Service Coverage Ratio (DSCR) = NOI ÷ Debt Service.
These metrics help you compare properties, negotiate price, and test different down payments or rates.
Quick screens Columbus investors use
Use shortcuts to sort deals fast, then verify with a full pro forma.
- 50 percent rule: operating expenses often land near 50 percent of gross rents for small residential property, not including the mortgage. This is a screen, not a final budget.
- GRM (Gross Rent Multiplier) = Purchase Price ÷ Gross Annual Rent. This ignores expenses, so do not stop here.
- 1 percent rule: monthly rent near 1 percent of price is rare in strong or appreciating submarkets. Treat it as a coarse filter only.
Example: Columbus duplex pro forma (hypothetical)
Use this sample to see how the math flows. Replace every input with live Columbus numbers before making a decision.
Assumptions (illustrative only):
- Purchase price: 220,000
- Unit A rent: 1,100 per month; Unit B rent: 1,000 per month
- Other income: 50 per month
- Vacancy: 7 percent of gross scheduled rent
- Annual property tax estimate: 2,400
- Insurance: 900 per year
- Utilities (owner-paid): 1,200 per year
- Maintenance and repairs: 8 percent of gross rents
- CapEx reserves: 800 per year
- Management: 8 percent of collected rent
- Financing: 25 percent down, 30-year fixed at 6.0 percent on 165,000 loan, annual debt service about 11,917
Step-by-step math:
- Gross Scheduled Income (GSI) = (2,100 × 12) + (50 × 12) = 25,200 + 600 = 25,800.
- Vacancy Loss = 7 percent × 25,200 = 1,764.
EGI = 25,800 − 1,764 = 24,036.
- Operating Expenses: taxes 2,400; insurance 900; utilities 1,200; maintenance 8 percent × 25,200 = 2,016; CapEx 800; management 8 percent × 24,036 = about 1,923; misc 500.
Total Operating Expenses ≈ 10,739.
- NOI = 24,036 − 10,739 = 13,297.
- Debt Service ≈ 11,917.
Cash Flow Before Tax = 13,297 − 11,917 = 1,380 per year.
- Cap Rate = 13,297 ÷ 220,000 ≈ 6.0 percent.
Cash-on-Cash = 1,380 ÷ 55,000 ≈ 2.5 percent.
Interpretation: this example produces a modest cap rate and a low cash-on-cash return at the sample price and rate. That tells you to verify rents and expenses, negotiate purchase price, test different financing, and model sensitivity for rent, vacancy, and maintenance.
Where to pull real numbers in Columbus
Common pitfalls to avoid
- Underestimating property taxes: use the parcel’s actual tax history and confirm whether a reassessment is likely after a sale.
- Ignoring vacancy seasonality: student submarkets often see more turnover. Raise your vacancy allowance if needed.
- Lowballing maintenance and CapEx: older Columbus housing stock can surprise you. Budget realistic reserves.
- Forgetting owner-paid utilities: clarify metering and who pays each utility before you analyze.
- Skipping insurance quotes: older wiring, roofs, or code issues can increase premiums.
- Not testing sensitivity: model rent down 5 to 10 percent, vacancy up, or interest rates higher to understand your downside.
Work with a local guide
You do not have to model this alone. If you want neighborhood-level rent comps, a custom pro forma, and a negotiation plan based on your target cap rate or cash-on-cash, connect with Brad Gregg. You will get clear steps, local data, and responsive guidance from search through closing.
FAQs
What is the first step to analyze a Columbus duplex?
- Start by estimating market rent for each unit with recent local comps, then build your pro forma in order: income, vacancy, operating expenses, NOI, financing, and returns.
How do I estimate property taxes in Franklin County?
- Pull the parcel’s actual tax history from the Franklin County Auditor and remember Ohio calculates taxes using 35 percent of market value with local rates.
What vacancy rate should I use near Ohio State University?
- Stable submarkets often model 5 to 10 percent vacancy, but student-heavy areas can run higher, so use the upper end or increase your allowance to reflect turnover.
Can I use FHA to buy a Columbus duplex and rent one unit?
- Yes, if you occupy one unit as your primary residence; FHA permits 1 to 4 unit financing with low down payment, subject to rules in the HUD policy handbook.
What expenses should I include beyond taxes and insurance?
- Include owner-paid utilities, maintenance and repairs, CapEx reserves, property management, and other costs like licenses, inspections, landscaping, and pest control.
How do I calculate cash-on-cash return for a duplex?
- Divide your annual cash flow before tax by your total cash invested, including down payment and closing costs, to get the cash-on-cash percentage.
Where can I confirm landlord-tenant rules for Columbus rentals?
