Are you looking at a Fort Lauderdale duplex and wondering if the numbers truly work? You are not alone. Between insurance, flood risk, and neighborhood-level rent swings, it can be hard to know what to trust. In this guide, you will learn a clear, step-by-step way to underwrite a duplex in Fort Lauderdale and greater Broward so you can move forward with confidence. Let’s dive in.
Start with local checkpoints
Before you model cash flow, confirm the details that can change your outcome the most in Fort Lauderdale.
- Flood status: Check FEMA maps for Special Flood Hazard Areas. Lenders require flood insurance for properties in these zones.
- Rental rules: Verify City of Fort Lauderdale rental registration, licensing, and any business tax requirements. Confirm there are no open code violations.
- Short-term rental: If you are considering short-term or hybrid strategies, review current city ordinances and licensing. Some areas have restrictions.
- Zoning and use: Make sure the property is a legal duplex with two permitted units and a valid certificate of occupancy.
- Micro-market comps: Fort Lauderdale is a city of micro-markets. Neighborhoods like Victoria Park, Rio Vista, Coral Ridge, and areas closer to the beach or commercial nodes often command higher rents and prices than inland pockets. Pull comps by neighborhood and even by block, not citywide averages.
Build your underwriting file
A simple spreadsheet and a disciplined checklist will keep you accurate and fast.
Collect property facts
Gather these items before you start modeling:
- Address, parcel ID, legal description, year built, lot size
- Unit mix, interior square footage, beds and baths per unit
- Recent sales history or current list price, and any seller concessions
- In-place rents, lease start and end dates, security deposits, payment history
- Utility setup, including who pays water, sewer, trash, electricity, gas; meter details
- Recent capital improvements and deferred maintenance; roof, HVAC, electrical, plumbing service records
- Insurance history, including premiums and any wind or flood claims
- Flood zone details and any elevation certificate; wind mitigation features
- Permit history, code violations, certificate of occupancy status
- The current property tax bill and exemptions
Project effective gross income
Work unit by unit for accuracy.
- In-place rent per unit
- Market rent estimate per unit using 3 to 5 nearby comps that match size and condition
- Other income potential, such as parking, laundry, pet rent, or storage, only if realistic in this location
- Vacancy and credit loss, typically 5 to 10 percent for small multifamily. Owner-occupant house-hacks can model lower vacancy. Use sensitivity tests to see the impact.
Effective Gross Income equals gross scheduled rent minus vacancy, plus other income.
Estimate operating expenses
Use actual bills when possible and get insurance quotes early. Florida premiums can vary widely by block, elevation, and construction type.
- Property taxes: Start with the current tax bill and confirm any special assessments.
- Insurance: Property, wind or hurricane, flood if required, liability, and loss of rent coverage.
- Utilities: Owner-paid water, sewer, trash, landscaping, and any shared electric or gas.
- Repairs and maintenance: Routine upkeep, turnovers, pest control, landscaping.
- Capital expenditures reserve: Roof, HVAC, appliances, water heaters, exterior paint.
- Property management: If using a manager, many small portfolios see 6 to 10 percent of collected rents.
- HOA or condo fees: If applicable.
- Administrative: Advertising, leasing fees, accounting, legal, licensing and inspection fees, and a reserve for bad debt or eviction costs.
Practical sizing tips:
- Start with real tax and insurance bills. If not available, pull quotes early.
- For repairs and maintenance plus CapEx reserves, small investors often start with a combined estimate that equates to several hundred dollars per unit per month, then refine with inspection findings and contractor bids.
Calculate NOI and value checks
These metrics help you compare deals and avoid overpaying.
- NOI equals Effective Gross Income minus Operating Expenses, excluding debt service.
- Cap Rate equals NOI divided by Purchase Price.
- Gross Rent Multiplier equals Purchase Price divided by Gross Scheduled Rent, a quick screen.
- DSCR equals NOI divided by Annual Debt Service. Many lenders look for 1.15 to 1.25 or higher on investment loans.
- Cash-on-Cash equals Pre-tax Cash Flow divided by Total Cash Invested, which includes closing costs, initial repairs, and reserves.
Illustrative example, validate with local quotes and comps:
- Gross scheduled rent 4,200 per month for two units, other income 100 per month
- Vacancy at 7 percent equals 294 per month
- Effective Gross Income equals 4,006 per month
- Operating expenses estimate 1,900 per month including taxes, insurance, utilities, maintenance, reserves, and management
- NOI equals 2,106 per month or 25,272 per year
- If purchase price is 500,000, Cap Rate is about 5.05 percent
Model financing and cash flow
Use realistic loan terms based on your strategy.
- Owner-occupant: FHA and VA programs, if eligible, and conventional 2-unit options may allow lower down payments and rates. Confirm current underwriting rules and lender overlays.
- Investor loans: Expect higher down payments and potentially higher rates. Many lenders require a DSCR at or above 1.15 to 1.25.
- Cash-on-cash: Include down payment, closing costs, initial repairs, and starting reserves in your cash invested.
- Sensitivity: Run conservative, base, and optimistic cases for rents and expenses, as well as interest rate and insurance cost changes.
Plan exits early
Your exit will shape your risk and return.
- Hold long term: Stable rental income, potential appreciation, and house-hack benefits if you live in one unit.
- BRRRR sequence: Buy, rehab, rent, refinance, repeat. Requires supportable after-repair value and post-rehab rent comps.
- Short-term rental: Only if permitted. Rules vary, and compliance and tax collection are required.
- Resale modeling: Estimate future value using a cap rate on projected NOI, then subtract likely sale costs.
Fort Lauderdale insurance and flood
Insurance is a major line item in Broward, and it deserves early attention.
Flood risk and coverage
- If the duplex sits in a FEMA Special Flood Hazard Area and there is a regulated lender, flood insurance is required.
- Flood policies are separate from property insurance and can be through the National Flood Insurance Program or private carriers.
- An elevation certificate can reduce premiums in some cases. Ask the seller or order one if needed.
Wind and hurricane
- Florida carriers often use percentage hurricane deductibles based on insured value.
- Wind mitigation features, such as impact windows, shutters, and strengthened roof attachments, can generate premium credits. A wind mitigation inspection can quantify savings.
- Citizens Property Insurance is the insurer of last resort. Many owners still compare private market quotes.
Landlord vs owner-occupant policies
- If you live in one unit and rent the other, a standard homeowner policy may not cover rental use. Consider landlord policies or endorsements appropriate for duplexes.
- Ask about loss of rents coverage to protect income if a covered loss makes the property uninhabitable.
Claims history
- Prior claims can affect pricing and availability. Request the seller’s loss history and verify where possible.
Reserves, rehab, and inspections
Older South Florida duplexes deserve a careful look so you can budget properly.
- Inspection team: Hire a licensed home inspector and consider specialists for roof, HVAC, electrical, plumbing, and termite checks.
- High-impact items: Roof age and wind rating, HVAC condition and capacity, electrical panel brand and wiring type, plumbing material and leaks, moisture and mold, slab and drainage.
- Rehab budgeting: Price immediate repairs with contractor quotes before finalizing your offer. Include a contingency, often 5 to 10 percent of the purchase price for small renovations, adjusted for what you find.
- Replacement reserves: Plan for roof and HVAC schedules, plus appliances and water heaters. Set an annual reserve per unit and refine with real cost data.
- Cash reserves: Many lenders and experienced owners hold 3 to 6 months of mortgage payments plus operating reserves for surprises.
House-hack or pure investment
Both paths can work in Fort Lauderdale. Pick the one that matches your goals.
- House-hack benefits: Lower down payment options, better loan terms, and the ability to offset your housing cost with rent from the second unit.
- Investor hold: Potential for stronger DSCR or higher cash flow with market rents in both units, but expect higher down payment and rate.
- Neighborhood fit: Areas close to beaches, downtown, or commercial nodes may achieve higher rents, while inland pockets can offer lower prices. Underwrite each deal with block-level comps.
Spreadsheet structure and scenarios
Build a worksheet that you can reuse across candidates. Include:
- Inputs: Asking price, unit mix, square footage, in-place rents and leases, current tax bill, insurance and claims history, flood zone and elevation certificate, recent capital improvements, utility setup, photos, and known violations or permits.
- Income: Market rent comps per unit, other income potential, and a vacancy factor tied to local trends.
- Expenses: Taxes, insurance, owner-paid utilities, repairs and maintenance, management, reserves, licensing and admin, and a line for bad debt or legal costs.
- Core formulas: Gross Scheduled Rent, Vacancy, Other Income, Effective Gross Income, Operating Expenses, NOI, Cap Rate, Annual Debt Service, Cash Flow Before Tax, DSCR, Cash-on-Cash, and a payback period.
- Exit and sensitivity: Projected exit value using a cap rate on future NOI. Add sensitivity cases for rent ±10 percent, vacancy changes, and interest rate ±1 percent.
Run three scenarios for every duplex:
- Conservative: Lower rents, higher vacancy and insurance, full management expenses.
- Base: Market rents, average vacancy, verified insurance quote, realistic reserves.
- Optimistic: Faster lease-up, modest other income, and confirmed insurance credits for wind mitigation.
What to send for a curated list
If you want a short list of duplexes that fit your targets, prepare this request so you can underwrite quickly and compare apples to apples:
- Address and MLS or parcel ID
- Asking price and any seller concessions
- Unit mix, square footage, beds and baths per unit
- In-place rents with copies of leases, security deposits, and move-in dates
- Most recent property tax bill and assessed value
- Insurance premium history and any recent claims
- Flood zone and any elevation certificate
- Recent capital improvements and ages for roof and HVAC
- Interior and exterior photos with condition notes
- Utility setup and typical owner utility amounts
- 3 to 5 rent comps per unit and your market rent estimate
- Vacancy history and average turnover timeline
- Any known code violations, open permits, or rental licensing history
- Your target returns or constraints, such as minimum cash-on-cash or minimum DSCR
When you are ready to compare live deals across Fort Lauderdale and Broward, you can request a curated list and a side-by-side underwriting review.
Final thoughts
Analyzing a duplex in Fort Lauderdale rewards careful, local verification. Confirm flood status, get insurance quotes early, and work with block-level rent comps. Use a consistent worksheet with conservative, base, and optimistic cases so you can act decisively when the right opportunity appears.
If you want a second set of eyes on a specific duplex or a curated list matched to your return goals, Request a Free Concierge Consultation with Roi Danon.
FAQs
Do I need flood insurance for a Fort Lauderdale duplex?
- Not for every property. If a lender is involved and the duplex sits in a FEMA Special Flood Hazard Area, flood insurance is required. Always verify the flood map and lender requirements.
Can I buy a duplex with an FHA loan if I live in one unit?
- FHA often permits owner-occupant financing for 2 to 4 unit properties. Terms differ from conventional investor loans, so confirm current program rules and any lender overlays.
What vacancy rate should I use when modeling a Broward duplex?
- Many small multifamily models use 5 to 10 percent. House-hack buyers who occupy one unit may assume lower effective vacancy. Run sensitivity tests to see downside and upside.
How should I budget insurance in Fort Lauderdale?
- Start with quotes from local brokers. Premiums vary based on wind and flood exposure, elevation, mitigation features, and claims history. Include loss of rents coverage where appropriate.
How much should I plan for repairs and replacements on a duplex?
- Use inspection results to build itemized estimates. As a planning start, include routine maintenance plus a separate annual CapEx reserve per unit, then refine with actual local costs.
