Many people who are looking to invest in real estate have grappled with the problem of whether to invest in single-family or multi-unit dwellings. While each has its own set of advantages, investing in a duplex has a number of distinct benefits. Although a duplex may cost more to purchase and insure than a single-family home, you also have more of an opportunity to generate rental income thanks to the additional suite. If you’re deliberating between a duplex and a single-family home for your investment, here are some important considerations to keep in mind.
Duplexes Can Generate Additional Rental Income
Even if you charge less per suite with a duplex than you would for a single-family home, investing in a duplex, triplex, or fourplex property still gives you the ability to collect multiple rents. The existence of multiple revenue streams can then ultimately increase the value of the property.
But You Only Have to Maintain a Single Property
Another great benefit of the duplex is that while you reap the reward of double rental income, you still only have to maintain one home and one property. This includes things like mowing a single lawn, keeping up a single garden, maintaining one roof, worrying about pests in only one home, and all the other responsibilities that come with homeownership.
This benefit can be quite valuable for investors who want to expand their portfolio without committing to a much larger workload.
There is Less Risk of Lost Income if Tenants Vacate
Perhaps the greatest benefit of owning a multi-unit investment property is that the income is not tied to one tenant’s actions. If one tenant in a triplex moves away, an investor can still collect two rents while searching for a replacement renter. With a single-family, on the other hand, a tenant vacating can mean a completely empty rental suite for weeks or even months, and during this time you’ll have no rental income whatsoever.
There are Concerns to Keep in Mind
Investing in a multi-unit property does involve some challenges as well. First, it can be difficult to find the ideal duplex property simply because they are less common than their single-family counterparts.
Those who manage a multi-unit property will also deal with a greater number of tenants and repairs – depending on the quality of the tenants, this can make life difficult for investors who would normally prefer a more hands-off management approach.
As with any investment decision, those interested in purchasing either a multifamily or single family residential property will need to do their own homework and make a decision based on their own financial goals. If you already have a duplex, triplex, or fourplex opportunity in your sights, visit Commercial Direct’s Loan Customizer today and start designing the financing solution that works best for you.
Salomon Wancier is a creative and innovative Marketing Executive and Business Coach with 19+ year record of achievement managing marketing teams, forming strategic alliances, developing and directing marketing initiatives and using multiple vehicles/channels in continuously changing environments to increase sales and profits.