Being a homeowner and having rental properties are both great achievements, providing both financial stability and the pride of ownership. What if we told you that you could have both, wrapped into one?
Buying a duplex and renting half of it could be the perfect option for you. Not only will you be able to live in one half of the property but you will also be able to enjoy the perks of being a landlord. In this blog post, we will explore the reasons why buying a duplex and renting half could be an intelligent investment move.
1. Rental Income: By owning a duplex, you have the ability to rent out the other half, and this can provide an excellent source of additional income.
Rental income can cover a significant portion of your mortgage payment, insurance cost, taxes, and maintenance fees. This benefit alone makes investing in a duplex a smart move. Plus, having a rental income could boost your financial stability by acting as a secondary income stream alongside your primary job.
2. Lower Entry Cost: Compared to buying two separate properties, having a duplex can be a more cost-effective option. You only need a single mortgage, property tax bill, and insurance policy for both units. Furthermore, when you purchase a duplex, you could save money when it comes to closing costs, real estate agent fees, home inspection, and more.
Sure, maintaining the property could require extra effort and expenses, but with proper tenant screening and maintenance, the return on investment can far exceed the costs associated with owning a duplex.
3. Better Tenant Screening: Renting out part of your property means you must be vigilant about screening potential tenants. The good news is that the screening process for duplex rentals is often more rigorous than for standalone properties.
Purchasing a duplex provides you with an excellent opportunity to screen tenants well, ensuring that you are renting to responsible individuals who will maintain your property and pay their rent on time. Additionally, having tenants nearby can be an advantage in terms of monitoring any issues that might arise.
4. Resale Value: In addition to the benefits of rental income, owning a duplex can increase your property’s value. The resale value of a duplex may be higher than a single-family home. This is because buying a duplex is a sound investment for long-term rental income.
If you decide to sell, the duplex buyers will likely view your property as a valuable investment because of its potential rental income. Moreover, in a seller’s market, buying a duplex can give you an upper hand. You might have competing buyers for a duplex, and the prices could increase higher than you initially anticipated. This could lead to a sizable profit when you sell.
5. Built-In Community: When you invest in a duplex, you are also investing in a built-in community. You will have tenants living nearby who share the same property as you, so you’ll be able to establish ties with them.
This can be excellent for networking purposes or just for having new friendly neighbors. When living in a duplex and renting half, you’ll have people living nearby that can help you take care of the property and might even become long-term friends or even your support system in times of difficulty.
Conclusion: Buying a duplex and renting out half of it may sound like a daunting task, but now that you know the benefits, it’s an excellent investment opportunity worth considering. Rental income, lower entry costs, better tenant screening, higher resale value, and built-in community are just a few of the many reasons why purchasing a duplex could be a great and smart investment move.
Owning a duplex may gift you the best of both worlds – living in an excellent neighborhood while making a passive income. Take the time to research your area, find the right property, and hire a reputable property management company if you don’t have time to tend to it yourself. You may find that owning a duplex is the perfect beginning of a new financial future!