Just like every real estate property, building a duplex is a great investment for homeowners and landlords, albeit it still comes with its unique advantages and disadvantages. This article highlights the things you should know before buying or building a duplex.
Duplexes are houses that are divided into two separate units, but essentially share the same building. Building a duplex can come in different forms and for different reasons. Most people go for duplexes, whether they are buying or building with the intention of living in one of the units and renting the other out, while some other people just rent out the whole lot. We also have other instances where the owner leaves in one unit then keeps the other furnished as a guest house.
The aforementioned premises make owning a duplex a viable option of investment in property. The possibilities of its ownership are quite flexible. However, just like everything in life, it is not all rosy with any investment in duplexes. Though the basic understanding of what a duplex is tends towards good, that doesn’t mean you shouldn’t still weigh the pros and cons of owning a duplex before you hurriedly put your signature on the dotted lines
Here is a brief of what you know before buying or building a duplex;
1. You recover money expended
By renting out the second unit, you will be on your way to recovering your finances, especially if you had to break the banks to invest in the property. Money gotten from rent will help in your recovery phase and help you plan ahead. Though, you may not be able to permanently count on that income.
2. Duplexes are cheaper
Duplexes are generally more affordable than a lot of houses in the same area. Considering that a duplex is basically two houses, the fact that they′re cheaper than most single family houses is worth thinking about.
3. Rent to a friend or family member
A duplex may just be the best option for you if you need to be close to a friend or family member yet still need your privacy either as a single or married person.
4. Future benefits
When all is said and done or at that time of your life when you’ve attained full stability, you might decide to move out and rent both sides of the duplex for an even bigger boost to your income
1. Rental income not guaranteed
If the only way you can afford building a duplex is to rent out half, then you might want to consider something else. This is due to the fact that rental income from your tenant is not a sure bet. A tenant may come into your property with good intentions only to become your greatest nightmare a year later when his first rent expires.
2. Less privacy
You should also consider the fact that privacy is not guaranteed in duplexes. Only a wall, which is probably thin, or a partition in some cases will be separating you and your neighbour. Actually, you will be sharing close quarters with this tenant cum neighbour. In fact, you would know some of your tenant’s life’s challenges and most of his daily routine that it will be so difficult to feign ignorance when trouble comes knocking on your door. If you are not cautious enough some of your secrets may even get to your tenant. Also, in some cases you may virtually become too close that asking for the rent when due could possibly become difficult, especially when the tenant is going through some financial difficulties that you are aware of.
Again, your tenant may like to keep late nights or he’s usually not the quiet type which goes contrary to your lifestyle. So, you would have to be pretty sure the person you are offering tenancy is someone you will be comfortable living next to and not some misfit.
3. Potential lack of tenants
What happens if you do buy or build a duplex with the intention of renting out the other half, but can′t find a tenant? Finding a tenant isn′t a sure thing, and if your post-purchase finances is dependent on your income being supplemented by rent, not being able to find a tenant could be disastrous.
Though there are some obvious downsides to owning a duplex, it still doesn’t change the fact that many people still find it easy and profitable living in one area of their home then renting the other half to a good tenant. If you admit the right kind of tenant, it will save you the drama. A good tenant will not only support you in the maintenance of the duplex, he will also be cooperative and possibly become your best buddy
Do you own a duplex? If so, what are some of the biggest challenges that you’ve faced in dealing with the property and with tenants?