The idea of buying a duplex and renting out half of it sounds like a good option on paper. As far as starter homes go, it can be a sound financial decision. Which is what my boyfriend and I were thinking upon our recent duplex purchase, but man, what a big responsibility!


Pros

Income. With a tenant contributing to your monthly mortgage, you’ll have the opportunity to cushion your savings!

Loan Process. When you plan on renting out part of a duplex, you should be able to factor it into your income during the approval and loan process, which helps you and qualify for a larger loan.

Tax benefits.  You'll get your standard deductions for being a homeowner, but you can also deduct the costs of maintaining your rental property. And since a duplex is classified as two separate properties you may be able to deduct some of your capital gains when selling it.

Cons

Twice the expenses. While there are a lot of financial benefits to a duplex, some of the expenses double — and maintenance can be expensive! I'm learning this the hard way, as we have had some plumbing issues pop up. Ugh!

Becoming a landlord. Once you rent out the other half, you become a landlord and it’s a business that requires special attention. It's important you follow your city's housing codes and guidelines. Inspectors will hold you accountable and things must be up to code or you will be hit with a big fine.

Tenants Expectations. When your tenants are just next door, it's very easy and convenient for them to contact you, which means they may expect things on a quicker timeline than they would from the average landlord. Communication will be important!


 

Depending on your location, you’ll have different rules and regulations to abide by, including your tenants' rights. These laws cover things like security deposits and what you need to disclose about the unit to potential renters and more.

Overall, if you are considering purchasing a duplex my advice is to make sure you are ready mentally and financially for repairs. It can get overwhelming when multiple maintenance jobs need to happen all at once. Also, make sure you know all the rules and regulations ahead of time so you are prepared!

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