A duplex is a home that falls into the category of a multi-family home, and a typical duplex will have two units attached together. If you are thinking of buying one so that you can live in one side and rent out the other, here are three things you should know before you rush into making a purchase.
Duplexes Are Great Investment Opportunities
People who buy duplexes to have a place to live and a place to rent out can often make good money doing this; however, it requires choosing the right duplex and ensuring that there are good tenants living in the other side all the time. Without these two factors, it may be hard to make money owning a duplex. It is also important to understand that it may take time to actually start seeing a profit from this investment opportunity. After all, you will have to pay off the mortgage on the home before you can start receiving rental income that you can keep and view as a profit.
It Will Be Harder to Get a Loan
Secondly, while this is a great type of investment to purchase, it is not always easy to get a loan for a duplex. You will need to have really good credit to qualify for a loan, and you may also need to prove that you will be able to keep the other unit occupied at all times. Your income might have to be enough to cover the mortgage payment for both sides, but this is not always the case. Some lenders will let you include the rental income from the other unit into your income when applying for a loan, but this varies.
You May End Up with More Tax Write-Offs
The other thing you should know about this is that you might be able to have more tax write-offs when buying a home. You will have to add up all the income you receive from the tenant living there, but you will also get to write off all the expenses tied to that unit. This includes the mortgage interest expense, the expenses for insurance and taxes, and all the money you spend on repairs and maintenance for that unit.
If you are still interested in buying a duplex for this purpose, you should talk to a local real estate agent to begin your search for the right property to buy.