Realtor & Homes for Sale in Travelers Rest SC | Diamond Realty of the Upstate

Think Duplex. DUPLEX!!

When most of us think of buying our first home, we automatically think single family home or condo. While both can fulfill our homeownership dreams, I want to challenge you to think about buying a duplex first!

This was already on my mind and then I happened to find an article by Trulia: 5 Reasons Your First Home Should Be A Duplex.

Trulia lists the following 5 reasons.

  1. Additional Tax Write Offs. Every home owner gets to write off mortgage interest, but with a duplex it’s only for the side that you live in. But, you get additional write offs for the rented side – cost to rent & manage the duplex, utilities, repairs, and more. And of course, always check with your tax professional before venturing into the rental market.
  2. Mortgage Advantages. A duplex is considered one property, so you’d have one mortgage versus buying your single family home to live in and then another mortgage for a separate rental property. By living in one of the duplex units, you may qualify for a lower interest rate. You also may qualify for a larger mortgage with a duplex than with a single family home if you can include the potential rent as income.
  3. Learning To Become A Landlord. Landlords must know rental laws of their state, how to write & modify leases, and ways to screen renters. They must also learn to collect rent. Easiest way to start? Live next door! By being “on site”, you will be able to daily assess your property for repairs and make sure your tenants are being responsible renters without invading their privacy (part of the landlord/tenant laws that you’ll need to learn is that you can’t enter their residence whenever you please!).
  4. Vacation Rental. Airbnb and VRBO (Vacation Rental By Owner) are huge and more and more people are turning to those sites versus a traditional hotel. Normally, you will get a higher per night rental rate on a short term rental compared to a leased rental. This translates to more rental income for you. You will have to factor in the costs of cleaning after each vacation rental, but if you’re earning more, the vacation rental may still come out on top. Be sure to investigate cleaning costs, potential rental rates for your area, and local ordinances regarding vacation rentals.
  5. Options. The second unit of your duplex leaves you with so. many. options. Besides a rental unit, you could use the space as an office or studio if you work from home (check for tax write offs!). It could also be a dwelling for elderly parents or other family members or even a guest house. You’re only limited by your imagination.

 

Now, I think these reasons are all fantastic, but

I’m going to give you my TOP TWO reasons to seriously consider a duplex.

 

Someone else is paying your mortgage! You would need to check if rental rates in your area are high enough to cover the payment, but yes, your renters could potentially be paying for you to live for free and you could direct your dollars elsewhere, such as paying off your student loans or saving for your children’s college fund.

Pay off your mortgage in half the time! Even better, if your tenants pay their rent and you pay your mortgage payment, your property will be paid off in half the time. Then, you will have two rental units that are generating income for you and then you can build your single family home. Or, buy another duplex! In the 30 years it would’ve taken you to pay off a single family home, you will have paid off 2 properties and now have 4 rental units generating income for you.

Think duplex, duplex, DUPLEX!

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