March 16th, 2022 | Updated on June 29th, 2022
Are you thinking about buying a new home? You’re not alone. Last year, over 5.6 million homes were sold across the US, and that number is expected to increase in 2022.
With home prices through the roof (no pun intended), many home buyers are turning to a new strategy to save money on their mortgages, and that’s buying duplex homes.
So, what is a duplex home, and is it right for you? Well, we can answer that with our duplex home guide!
What Is A Duplex Home?
A duplex home is shaped like a house, rather than an apartment building, and has two units that are detached by a separate wall or floor. Each unit will have its own kitchen, bathroom, and common areas.
Generally speaking, most buildings that have units side-by-side will have two floors within each unit, creating more of a single-unit feel, while ones stacked upon each other will have one floor per unit. However, there are exceptions to this.
In most cases, each occupant will have their own door to their unit, meaning the only shared spaces are outside, whether it be parking or yard spaces.
Many investors and home buyers choose to buy duplexes because they are right in the sweet spot between owning a single-family home and an apartment building. Let’s talk about some of the benefits.
Benefits Of Investing In A Duplex Home
If you have the money to invest in a home, we couldn’t recommend buying a duplex more. Even if it costs a little extra, the pros outweigh the cons. Here’s why.
1. Investment
Not only are you buying a home to potentially live in, but you’re also buying an investment. When you purchase a duplex, you can live in it while your tenant pays for your mortgage.
Think we’re kidding? The maths almost always works out to that and, as a landlord, you can set the rent prices you think is fair.
Let’s say you come up short every month and owe $200 on your mortgage out of your own pocket. In that case, you can easily pay off the mortgage, save up for your dream home, move there, rent out your unit, and earn extra income for life.
Not only that, but real estate has one other secret. Not only can you earn rent over time but you don’t lose the asset that you rent out, so if you ever decide to sell, you can earn your money back and more. There’s a reason why millionaires agree that real estate is the best investment of our time.
Also, duplexes aren’t legally considered “commercial property” as an apartment building is, which will help you at tax time. You’ll still have to report your income and pay property taxes, but it isn’t even comparable to a large apartment building.
2. Not Overwhelming
While you live on the property, you’ll only have one tenant, allowing you to be a fairly hands-off landlord. You won’t have too many tenants calling you at 3 am to fix a sink.
Well, if real estate investing interests you, then a duplex is the perfect way to start and gain some experience. If you learn it isn’t for you, you won’t be stuck with more units to manage!
You’ll also be able to give your full attention to your one tenant, which makes it easier to collect rent, handle maintenance, and avoid confusion down the road.
3. Privacy
Compared to larger buildings you’ll find all throughout major cities like Chicago, duplex buildings are a major step up. They typically have the same feel as a small home and often come with semi-private outdoor spaces.
Whether the units are on top of or beside each other, occupants won’t feel surrounded living in one, as they may feel in a larger apartment building.
How To Buy A Duplex Home
Now that you know some of the benefits of owning a duplex house, you’re probably interested in purchasing one for yourself. Before you jump into your investment, let’s talk about a quick duplex home-buying guide.
First, look at duplex homes for sale in your area and see if there are any that match your price range. If buildings are currently out of your reach, then set a savings goal and stick to it!
Second, you should find a realtor who specialises in investment properties like duplexes, as they will know what to look for.
Next, remember that this is an investment. Get a thorough inspection of the building before signing anything and try to find a building in the right neighbourhood. If the building or the area goes downhill, so does your investment.
For that reason, extra care needs to be taken before purchasing the property. Finding homes near downtown areas, schools, or public transportation stops is always beneficial.
Lastly, there’s one other factor beyond the neighbourhood and building that can harm your investment, and that’s the tenants. Find the right tenant to occupy your new unit by running background, credit, and rental history checks.
Remember, one bad tenant can destroy your investment, and you may have to live right next to them!
Make Your Move
Now that we’ve answered the question, “What is a duplex home?”, you understand why it’s such a popular investment for home buyers and investors alike. Why wouldn’t you let someone else pay your mortgage?
Follow our duplex home tips to maximise your home value, buy the house of your dreams, and keep reading our blog for our latest tips!
