Is It Worth It to Buy a Duplex?
Homes come in all shapes and sizes. A duplex is a house that’s divided into two apartments with a separate entrance for each. They’re really common in larger cities in the United States, but there’s a lot of confusion over whether it’s worth it to buy one for yourself.
Duplexes, also called a “multifamily dwelling” are particularly popular with both extended families and landlords looking for an investment property. The duplex itself might have a shared wall dividing the two homes, or the two spaces might be stacked on top of each other. If you buy a duplex, you’re essentially buying two homes. This might make it a great value depending on your goals when buying a home. In this guide, we’ll talk about whether it is worth it to buy a duplex.
The Pros of Buying a Duplex
If you choose to buy a duplex, you’ll have a lot of different options that you wouldn’t have if you were simply buying a single-family home or a single condo. There are a lot of unexpected upsides.
First, you can choose to live in one of the units while you rent out the second unit. This is an affordable option that gives you a source of passive income to put towards your mortgage. For instance, if your monthly mortgage payment for your duplex is $1500 and you’re able to charge $1000 in rent for one unit. That means you’ll only need to make up the $500 difference yourself each month. Talk about big savings!
If you’d rather live in both units with extended family, a duplex gives your family a lot of privacy and flexibility. This can be a great fit for a special needs family member, elderly parent, or a young adult just starting a new career.
Finally, if you choose to use the property as an investment and live elsewhere, you get two units for the price of one. Because it’s all in one space, it’s much easier to maintain both properties and keep track of expenses that you can deduct during tax season.
Cons of Buying a Duplex
Now that you know why a duplex can be a great option depending on your situation, let’s talk about some of the cons. First, buying a duplex might not be ideal if you plan to live there yourself. Not everyone wants to have their tenants right next to them, and this could be awkward depending on whether you have complaints or requests. Let’s face it; most people don’t want to live next to their landlord!
You’ll also be responsible for all the maintenance for the property as a landlord. This isn’t always a welcome part of the landlord process. In addition, depending on your local market, it might be hard to find renters if you choose to rent the second unit. If you choose to rent out both properties, they’ll have to deal with a lack of privacy from either sharing walls or being on top of each other.
Finally, selling your duplex might not be as easy as selling a single family home. While investing in real estate might be a smart move, the market for selling a duplex is much smaller since it’s not usually something that appeals to traditional buyers. You might need to be willing to go above and beyond to sell a duplex quickly compared to a single family home.
Should You Buy a Duplex?
As you can see, there are a lot of perks of buying a duplex. It might be worth it depending on your goals. If you plan to rent out one or both units, it’s a great way to pay off your mortgage quickly while earning passive income. In addition, if you need to keep your extended family close, a duplex can be an excellent solution.
However, don’t rush into buying a duplex too quickly. They’re certainly not as easy to resell depending on your housing market. Make sure you know exactly what you’re getting into when you purchase a duplex.