Whether you're looking to buy a home for your family or planning to get into real estate, buying a duplex could be a good investment. You can rent both units out separately or live in one yourself and raise money to pay the mortgage by renting out the other half of the property.
Let's take a look at some of the advantages and disadvantages of buying a duplex.
Advantages of Buying a Duplex
The main advantage of buying a duplex is the potential rent income it can generate, which you can then use to pay off the mortgage on your investment. Renters are often willing to pay more rent on a duplex than on a standard apartment as they like having a yard, something which many apartment blocks don't offer.
Buying a duplex can also make you eligible for big tax write-offs. Whenever you make any repairs to the property, for example, you have the ability to write those expenses off. This can lead to thousands of dollars in tax savings.
Disadvantages of Buying a Duplex
The main risk of buying a duplex is the possibility of getting bad tenants who don't look after the property or pay the rent on time. To reduce this risk, you need a reliable tenant-screening process to weed out people you wouldn't want as neighbors. A rental agency can help you screen tenants, as well as taking on some of the administrative burden of being a landlord.
Is a Duplex a Good Investment For You?
Buying a duplex can be a good way of generating passive income, as long as you take steps to protect yourself from bad tenants. With a good screening process in place, you can use your duplex to gradually build wealth. Owning a duplex is also a good way to dip your toe in the world of real estate investing to see if it's a method of making money you want to explore further.
Interested in purchasing a duplex? Learn about Contour Mortgage's multi-family home loans.
