Things You Need to Know About Buying a Duplex

If you’re a beginner investor and want to make money in real estate, then let us tell you one thing which is buying a duplex might be a great investment for you.

A duplex is a house having two single-family homes in it. Each of the units have separate entrances. At first, it was likely housed just one family. But then it got remodeled by someone and split in two separate units. Nowadays duplexes are designed like upstairs for one family and the downstairs for another or sometimes just splitting the home right down the middle.

Source: Forbes

In this article, you’ll get some top tips to help you on your way towards buying a duplex. First, we will see “What are the benefits of buying a duplex?”

Having a duplex and managing it comes with several benefits. Here are some of them:

You Can Have Double Income

When you buy house for renting out, you would like to get as much money as possible from then. If you buy a duplex, you will actually get two houses in one. So, here is the chance to double your income from just one property. 

There are several options in front of you about managing your duplex. If you want, you can stay in one unit and rent out the other. Again, you can do another thing by choosing to live off-site and renting out both the units. It’s totally up to you. You can choose any of these by calculating the financial circumstances.

You have the chance to make a profit from your duplex by charging the rent more for your mortgage payments. With this, you can not only cover your living expenses but also make a good profit.

It Qualifies You for a Few Tax Advantages

Along with a profit, buying a duplex qualifies you for getting tax benefits. If you live on your side, then you’re a landlord to the second unit and technically can take tax deductions on the property expenses. Remember the principal rule of “Invest where you live”, if you’re a new investor.

Source: Contour Mortgage

If you consider branching out of state, then you should investigate about which state gives the best tax benefits to real estate investors. Some state set the property tax rate for duplexes not on their current sales value, but on their income potential. So, before you buy a duplex, you must figure out whether these things are good or bad for you.

It’s Easy to Finance a Duplex

When you buy a duplex, you’ll see that the lenders are willing to partner with the real estate investors so that they can come up with great financing options for them.

So, here are three great options, which are available to you when you want to buy a duplex:

(1) A Regular Mortgage: You can set a regular mortgage to finance your duplex. In this case, the regular or common route to follow is to set a 20% down payment and then sign up for a 30-year old mortgage to pay off the rest. You can negotiate with your lender about a reasonable interest rate of the mortgage.

(2) An Owner-Occupier Loan: It’s a special type of loan which is very similar to traditional mortgage. But it has one big rule which is- you have to live on the duplex to get qualified for it. This way is perfectly fit for those people who are interested in living in the duplex.

(3) Owner Financing: It’s a tricky one, but still in vogue. In this case, you’ll get the previous owner of the duplex as your lender. You will make your mortgage payments directly to your seller.

Duplexes Help in Paying Your Mortgage

As mentioned earlier, buying a duplex gives you the option to live on the same home you’re renting out and there is a chance to make profit out of it. Just think, if you’re having hard times financially to pay off your mortgage, then the rents may help you to pay down the mortgage of the entire duplex. So, considering this thing you should purchase a duplex.

It’s a Crash Course Intro to real Estate Investing 

As you’re living on the site, you get an opportunity to experience of being a property manager, landlord and a real estate investor all at a time. And this is possible, because you’re renting out the other half of your own home.

Some Difficulties to Buy a Duplex

Everything has a positive and a negative side. In this case, you also might face some drawbacks of buying a duplex. So, here are a few things about which you should think twice before you truly know whether buying a duplex is good for you or not.

(1) The Tenants Issue: Being a landlord for any type of property is not that easy. There is always the possibility of having difficulties with your tenants. When you stay right next door with your tenants, then it would be hard to get away from them. But this issue can be solved by putting boundaries between you and your tenants as a contract when they move in.

Source: Homeonline.com

If your tenants can’t keep it or you want to make things easier from the beginning then a third party property manager can be hired. This third party property manager or company will take care of tenants’ complaints and questions for you.

Again, if you want the renters will not even know that you’re the owner of the property as the third party manager will operate everything for you.

(2) You Have to Be on Call for 24/7: As mentioned earlier, becoming a landlord is not an easy task. Even if you have good tenants, but the day when you start renting out a place, you will be bound by the laws of landlord-tenant relationship. These laws will make you responsible for certain things. Every problem the renters faces like if the doors squeak or the dryer breaks you have to solve these things out.
So, here you can also hire a professional property management company to help you to boost you up at the beginning of your starting as a real estate investor.

Reference: https://listwithclever.com/real-estate-blog/everything-you-need-to-know-about-buying-a-duplex/

Featured Image: Forbes

Some Tips for Buying a Hotel

Hotel business is very popular nowadays. So many people thinks of it as a ‘money machine’ business. But the focus should be really...

Top Ten Best Real Estate Companies in India

Over the last few decades, real estate business in India has risen up to a great height. These days, one of the...

Tips for Buying an Apartment Complex: Part 2

To buy an apartment complex is more involving than investing in single family properties. This involves a deeper understanding of the management...

8 Suggestions for Becoming a Prosperous Real Estate Agent

Among all kinds of businesses and career opportunities in the world, the real estate sector is one of the most profitable one....

Few issues to look out for in Indian real estate market

Real estate market is growing all over the world. To accommodate more and more people, residential buildings nowadays don’t have alternative to spread wide...

Legal Procedures in Property Transaction

Legal procedures are always very important for a safe property transaction so that no further problems are created in future. In this...