Investing In A Duplex

Investing in real estate can be a lucrative and exciting endeavor if you’re passionate about becoming a landlord. You may not be able to know the very best time to get into real estate investing, but the sooner you can dive in at a price you can afford, the better. Here are the top 7 benefits of investing in a duplex. 

First and foremost, what’s a duplex?

A duplex is a type of MULTIfamily home that includes two units in the same building. Typically, you’ll find that most duplexes are purchased as an investment property, and one person owns both units, but in a condo setting, each unit can have individual owners. When that’s the case, each person owns the unit they live in, but they will share the ownership of the lot. 

There’s no standard layout for a duplex, but on first thought, you may think of a townhouse-style row home. Duplexes can have one unit on top of each other or some other configuration with two separate entrances. 

1. Owning a duplex is relatively low risk

Single Family Home

While you run the risk of having tenants that may cause issues, the risk of earning no money is very low. Compared to other investment properties like single-family homes, duplexes are subject to lower vacancy rates. Since they’re smaller than single-family homes, they have lower rent costs and enough room for families or young professionals than apartments or condos. Duplexes can be easier to rent for renters who are actively looking because they offer a “home” feeling, and if you choose to live next door, if any emergencies occur, it’s handy for you to be close by. Most tenants will likely feel more inclined to have a better relationship with you and treat your property with the utmost respect when you’re on the other side of the wall. 

If you chose to invest in a single-family home and didn’t have tenants for a few months, you would have zero rental income. If you own a MULTIfamily home, you may have one occupied unit and one empty unit, and you wouldn’t be totally on the hook for all the bills and your mortgage. It’s essential to have a nest egg when getting into real estate investing in case you do run into vacancies, so you don’t run into financial trouble. 

2. In terms of MULTIfamily homes, duplexes are the most affordable


Owning a MULTIfamily home can be a significant investment, but it can also be a substantial investment. Some MULTIfamily properties are millions of dollars. Duplexes are the most affordable option when looking at an investment property and getting a great return on investment. You get two properties for the price of an upscale single-family home, and the options for what you can do with it are endless. It might be more of an upfront cost, but you’re getting two units, so each unit will end up costing less than a single property, typically speaking. Even if you wanted to rent out one half and live in the other, you are still building outstanding equity. You can also budget to cover most of your bills and start your investment portfolio. Don’t miss out on a great time to start an investment property because MULTIfamily homes seem a little overwhelming or unattainable. Duplexes are a great “meet-in-the-middle” option. 

3. It gives you options

Owner Options

As the owner of a duplex or MULTIfamily home, your new property gives you plenty of options when it comes to creating cash flow. You can rent out both units, rent out only one unit, or rent one unit to friends or family. Many people invest in duplexes for aging parents or family members needing housing. It is still an excellent investment if that’s the route you’re going down because it’s still equity and a property that will increase in value. If you rent out both units, you can create plenty of extra cash flow that can cover your bills above and beyond the expenses of the duplex. Depending on how you do it, owning a duplex can be very lucrative. 

4. Duplexes are typically in great locations


Location is important when investing in real estate. Duplexes tend to be located in affordable neighborhoods that can have excellent amenities. The closer your property is to schools, highways, grocery stores, shopping, entertainment, and services, the better. It can help you get more for rent from tenants, and it’s convenient if you want to live there as well. 

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5. Better financing options


There are a couple of different options when it comes to financing your new MULTIfamily home. Getting a loan to finance your purchase is not any more difficult than getting approved for a traditional mortgage. The most commonly utilized financing methods include 203K loans, VA loans, FHA loans, traditional mortgages, and cash. 

VA loans are available for veterans of the US military. They typically don’t require any down payment and have great interest rates. FHA loans are best if you’re looking to live in one unit while renting out the other. These loans aren’t as challenging to get approved for, have lower down payment requirements, and have lower interest rates. 

203K loans are an excellent option when getting into real estate investing. It’s under the Federal Housing Administration loan, but it has options for lenders to get approved for extra funds to complete repairs on the property before renting. For instance, if your new duplex costs $100,000, you can get approved for an additional $30,000 or $40,000 that can be used to upgrade and repair the property. 

The 203K loan is an excellent option if you’re purchasing an older property that could use some love and care. Upgrading the features of the home will also help you get a higher amount for rent and will help drive interest in your property. Most people want to live in a nice space with lovely features that are new and won’t be a constant issue. 

6. Tax breaks


Tax Breaks

Owning a duplex as your investment property can benefit you considerably come tax time. As a MULTIfamily home investor, you’re eligible for certain tax deductions that you wouldn’t qualify for when owning a single-family home. You can also deduct expenses associated with your property, like repairs, maintenance, and landscaping. Purchasing an investment property is just one way to become an investor, but it’s a relatively good way to get to your investing goals if you do it properly. It can also teach you plenty of skills that you can apply throughout your life to other investment properties. 

7. Having a tenant cover your bills


Last but certainly not least, having your tenant or tenants cover your bills might be one of the most appealing parts of being a MULTIfamily property owner. Even when you choose to live on one side of the duplex and have a tenant on the other, you can likely subsidize your bills and mortgage payments. For instance, if you have a $2,000 mortgage on the duplex every month, you could rent out one side for $1,500, depending on your rental market, location, and quality of the suite. You can quickly pay your mortgage off early, have extra savings, or work to purchase another investment property. If you rented out both units, you could easily turn a profit and have positive cash flow and passive income. 

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Investing in real estate is not always a guaranteed success, and it comes with many risks, like any other investment. There are so many benefits to purchasing a MULTIfamily home like a duplex if you have the funds for it. If you can get a duplex for a price you can afford, you can make upgrades to and rent out for enough to cover a portion of your bills, you are already successful. Not only are there tax breaks, and statistically, duplexes are easier to rent, but you are also giving yourself plenty of options financially and property-wise. Purchasing a duplex is a wise and economical decision. Suppose you purchase a quality home and put some time and money into ensuring it’s a great place to live for you or your tenants. In that case, you will wonder why you didn’t get into real estate investing sooner. Purchasing a duplex can be one of the best financial decisions you can make, and now is the best time to get started. 

The team at are experts when it comes to MULTIfamily real estate and have worked with numerous buyers and sellers over the years. Specializing in duplexes, triplexes, fourplexes and other multifamily homes, Get Multifamily is the obvious choice when considering your next purchase or sale. 

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