Buying a duplex is a fantastic idea if you are looking to make some good income on a rental property. Many Phoenix investors prefer duplexes as a step up from renting single-family homes, and they find it is a great stepping stone to multi-family property rentals. If you have ever thought about buying one yourself, have a look at this comprehensive guide to buying a Phoenix duplex for sale in 2022.
Figure Out What You're Looking For
It's a good idea to think about what makes a suitable duplex property before you start looking for one to buy. A good quality property should have everything that a renter will need, it should be in a good location, and it should be easy to maintain. You want to look for a building that has been well taken care of so that you can have your renters in there as quickly as possible.
If there are too many repairs or issues that need to be taken care of, then you might be months away from making any income on the building. Weigh your options to see whether or not it is worth the wait but keep in mind that a better-looking building can fetch a bit more rent than one with significant issues.
Check Out What's Nearby
If you have a duplex that you are considering, have a look at what is around it to make sure that it's in a good location. For maximum rentability, you want it to be close to shopping, schools, and other major areas in the city. If it isn't close, have a look at what public transport runs in the area.
Residential areas are the best choice for duplexes, and many people prefer these over busy metro areas of the city. Look for duplexes that are close enough to things like shopping malls and churches but far enough away from industrial areas of town.
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Look at Your Finances
Duplexes are usually a pretty good price, but you need to make sure you can afford all of the extra upkeep before you start making purchases. Talk to a financial advisor about what you can afford and what kind of extra money you can put into your property. It would be great to find a place that has everything upgraded, but it's good to plan for any significant repairs that you might need to do.
You might need to get a loan in order to secure the down payment, so look into what loans are available specifically for duplexes or first-time property owners. If you plan on living in the other unit (we'll talk more about that later), then you should make sure you are mentioning that to the bank, as that will put you in a different loan category. Talking to a financial advisor is the best way to see what kind of financing is available to you.
Make an Offer
Before you make an offer, have a look at some of the other places in the area so you can get a good idea of what an average price is like. A seller will usually decide on who they choose within the first few days, so be prepared to get your paperwork ready. A real estate agent will be able to help you every step of the way to make the process nice and easy.
Now that you have purchased your duplex, it's time to start looking at it a little closer. You likely would have had an inspection during the selling process, but there may have been a few things you missed, or you might still have some improvements you want to make. If you are looking for a few things you need to consider after your purchase, then keep reading.
Look for Upgrades
If a seller really wants to make their duplex appealing to you, they likely would have done some upgrades to the building before listing it. If they haven't mentioned it, ask about things like the roof's age or the HVAC system so that you know when it will likely need to be replaced. A fresh coat of paint is nice, but you want to make sure you aren't investing your money into a property that is going to end up costing you.
The current owners should know a bit about their Phoenix duplex for sale, and they will likely be able to tell you when everything has been serviced last. Ask about any major repairs or issues that the current owner has dealt with so you know what you are getting into. If they mention that the plumbing has been an issue, then you'll need to think about whether it's a "replace the whole pipe system" issue or a "unclog a drainage pipe" issue.
Check the Utility Setup
Most homes that have been zoned and designated as duplexes will have a separate utility system that allows each renter to pay their own bills separately, but not every duplex has this. If your duplex has all of the utilities set up to one system, then you will likely be offering an all-inclusive rental. If you choose to do this, make sure you are calculating the right amount for utilities to add to the rent; otherwise, you will be in the hole.
In some situations, you can contact the utility company to come and split the line up into two separate bills so that each renter is responsible for their own. This is ideal for a place like Phoenix, which has soaring temperatures in the summer that end up draining energy bills with air conditioning costs. If you are unable to get the line split and you don't want to offer an all-inclusive bill, then try looking into a way to split the bill equally between the two tenants based on the occupancy in the units.
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Count Your Parking Spaces
Some residential duplexes were originally single-family homes that were converted at some point which means they might not have made a good arrangement for parking. You want to make sure your renter has a secure place to put their vehicle that is close to the building. If there is only one designated spot, then you need to find a renter who is fine going without.
If you need an extra spot, then you can look into what arrangements the city has for street parking. They will sometimes require a small monthly fee, and you can easily tack that onto the rent and offer the spot for the other tenant.
Have a Gander at the Yard Situation
If you are lucky enough to have some yard with the property, then you should consider what your tenants might be using it for. You might want to divide the yard so that each unit is responsible for its own area or leave it communal and establish some solid rules for both sides to follow. You should also look into what the maintenance will be like for the yards before you consider the purchase.
If you don't have a property management company, then you will need to find a way to keep the grass and yard looking fresh. A local landscaping company is a great idea, and they often offer contracts so you can have them service multiple properties for one fee. People enjoy living in a duplex that looks just as good on the outside as it does on the inside, so it's a good idea to have an outdoor maintenance plan in place.
Clean Up Shared Space
Duplexes will often have some areas that the tenants will share together, whether it's a laundry room or a common hallway. Make sure these areas look good and don't have any major issues. You want to make sure the door locks or door buzzers are in working order so you can keep the residents happy.
Laundry is one thing that is commonly shared for duplex units. Check out what it will take to invest in a card-reading laundry system that will allow your tenants to load a card with funds and spend them as needed on the laundry machines. This high-tech upgrade is worth the extra money, and it's an excellent way to bring in some value for the building.
Make sure you do your research and buy a duplex that you can easily maintain so that you keep your renters happy.