October 10, 2017
FitSmallBusiness quoted me in How to Buy a Duplex, Triplex, or Fourplex – The Ultimate Guide. It opens,
Buying a duplex, triplex, or fourplex can be a good investment for both investors and residential home buyers. Purchasing small multi-unit properties requires some basic understanding of how to locate, finance, and manage multiple units. Those activities are only slightly more involved than for buying single-family properties but can lead to a profitable multi-unit investment.
Buying a duplex, triplex, or fourplex can be broken down into 7 steps:
1. Determine Whether Buying a Duplex, Triplex, or Fourplex is Right for You
Whether you learn how to buy a duplex, triplex, or fourplex as an investor, or as a home buyer attempting to secure some rental income from your property, buying a small multifamily investment is a bit different than for a single-family property. Assessing the benefits and downsides at the outset is a good idea.
Benefits of Buying a Duplex or Small Multi-Family Building
There several reasons why duplexes, triplexes, and fourplexes are sensible purchases. Home buyers can live in one unit and generate rental income with the others; they provide a good way to start investing in multi-unit properties; and, for investors, they diversify the rents and consolidate expenses among multiple units.
You Can Live in One Unit of a Multi-Family Building and Generate Rental Income
If you are buying a personal residence, a duplex or other small multi-unit building will provide you with a place to live along with rental income. You can live in one unit while renting out the others to generate income.
It is fully possible, particularly with triplexes and quadraplexes that your rental income can pay your entire mortgage and maybe even a bit more. In effect, you can purchase a place to live, but have your tenants pay for it.
David Reiss, Professor of Law and Director, CUBE, The Center for Urban Business Entrepreneurship, Brooklyn Law School tells us:
“There are significant benefits that you can get frombuying and living in a duplex, triplex, or fourplex instead of a single-family home. For instance, you may be able to use the rental income from the additional units to increase the amount that you can borrow and that rental income can offset a big part of your monthly mortgage payment. You can also deduct more of your expenses, such as part of your insurance premium and a portion of your repair bills, as business expenses.”
Duplexes, Triplexes, and Four-Unit Properties Are a Good Way to Start Investing in Multi-Unit Properties
Learning how to buy a duplex, triplex, or fourplex provides a good entry into multi-unit properties without taking a deeper dive into apartment buildings. While screening tenants and managing renters in any kind of multi-unit building is a bit different than with single-family properties, the leap isn’t insurmountable. Duplexes and the like provide a good transition from managing single-family properties to handling multi-unit buildings without getting overwhelmed.| Permalink