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What Is A Duplex And Is It Right For You?

5-Minute Read
Published on June 4, 2020

We tend to think inside the box when it comes to real estate. Most home buyers view their housing options as limited to single-family homes or apartments in multistory buildings. But in the U.S., the housing market offers a wide variety of choices. One commonly overlooked option is investing in a duplex. If you’re trying to decide which style of living is most appropriate for your circumstances, learn what a duplex is and why it may make the most economic sense for you.

What Is A Duplex? 

A duplex is a two-family dwelling with two distinct units that are attached but possess separate, private entrances. The two attached units either share a common wall or floor, depending on their layout. They are ideal for extended families, first-time home buyers and real estate investors.

While duplexes can be found across most geographic areas, in New York City, the term “duplex” refers to a different type of housing: A two-story apartment that has staircase – or in rare cases, an elevator – within the unit. These spacious NYC apartments can be found in luxury high-rises and tenements alike.

Throughout the rest of the country, duplexes are often confused with similar types of multi-family housing options: Twin homes, triplexes and quadplexes. Twin homes are similar to duplexes in that they have two units that share a common wall. However, unlike a duplex, a twin home is considered to be two separate properties, given that the property line bisects the land at the common wall, providing each unit with its own lot.

Duplexes are actually more similar to triplexes and quadplexes (also referred to as fourplexes) in that they are viewed as one property on a single plot of land. The only difference is that triplexes have three units, and quadplexes have four.

What Are The Pros And Cons Of Duplex Living?

Duplexes provide home buyers with a unique financial opportunity. Still, there are pros and cons that come with this housing style. Duplexes enable buyers to become both homeowners and investors with a single purchase. Since duplexes offer two units within a single property, purchasers can live in one unit and rent out the other or choose to rent both units.

Therefore, duplexes can make homeownership far more affordable. The ability to earn rental income can enable you to purchase a home in a pricier neighborhood and help you pay off your mortgage faster. You can also choose to rent out the extra unit to extended family, which can be extremely beneficial if you have elderly parents or in-laws who require care or supervision. 

The downsides to duplexes revolve around the responsibilities of being a landlord, which include abiding by all local laws. Even if you rent out a unit to family, you must make sure that you clearly set boundaries and elucidate the financial obligations for all parties. If you must find tenants, the onus is on you to keep the unit rented consistently, so you can enjoy a constant revenue stream. Meaning, you must market the property, screen applicants, write up leases and be available to make any needed repairs, including repainting and maintaining the unit between tenants.

For some, another disadvantage to duplexes is your proximity to tenants. Privacy issues and noise complaints can arise given the fact that you share a driveway, yard and wall or floor. So you must be prepared to co-exist with whomever you choose as your tenants. The easiest way to ensure that your living situation does not get off to a rocky start is to outline rules and expectations in your leasing agreement.

Does Buying A Duplex Make Financial Sense?

To determine if buying a duplex makes financial sense for you, begin by considering your real estate goals and priorities. The ability to live in one unit and rent out the other can be a considerable economic advantage for anyone who wants an entry into real estate investing.

If you’re interested in a particular neighborhood or a higher-end home but are aware that it’s slightly out of your price range, buying a duplex can allow you to rent out the extra unit to a tenant who is able to shoulder the expenses. And if you’re not looking for a primary residence and want to jumpstart your real estate investing, purchasing a duplex house can make it easier to keep an eye on your investment properties and make your work as a landlord that much simpler.

On the other hand, if you have extended family and want a housing option that provides you with greater privacy and comfort, a duplex is the perfect opportunity to pool your resources, so you can be close – yet not too close. The most beneficial aspect of owning this type of housing is that your options are plentiful, and you can adapt the way you utilize your investment as your lifestyle changes.

Is A Duplex Right For Me?

Again, buying a duplex may be worthwhile if you fall into any of the following scenarios:

  • Family ties: If you want to live close to but not with extended family, having two connected units will give you the proximity you need to keep an eye on older parents or help your children raise your grandchildren. And, having two separate entrances to those units will provide you with the privacy and serenity you may crave during times of stress or chaos.

  • Budget concerns: If you want to live in a larger home or a better location but don’t have the budget to move on your own, having a spare unit to rent out will make your purchase more affordable and prevent you from becoming house poor. The rental income will help you pay off your mortgage and afford you greater security as you get older.

  • Investment dreams: If you’re considering a career as a real estate investor or want to maximize your investment in a single property, a duplex will furnish you with extensive property management experience and higher rental income than you would receive purchasing a single-family home.

Summary: Think Outside The Single-Family-Home Box 

When it comes to purchasing real estate, sometimes it’s best to think outside the single-family-home box. Having two connected units that share a yard and driveway but possess their own private entrances will make your landlord duties easier while still giving you enough privacy to enjoy your residence. If you’re currently in the market for real estate, purchasing a duplex instead of a single-family home will provide you with greater flexibility and make homeownership far more affordable.

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