We feel that more people should consider purchasing a duplex instead of a home. Whether you are in the market to purchase a home or investment property, the duplex fits both needs with a multitude of advantages.
Buying a duplex can often be more affordable than a single family home and still offer the comfort and privacy.
The first time home buyer, especially, should consider the purchase of a duplex. If you found a newly constructed duplex the asking price would be on the high end, due to the cost of land and the high cost for labor and materials. However, there are many opportunities to purchase an existing duplex property in the $1,200,000 to $1,500,000 price range in our area.
Buying a duplex is like buying a home with cash flow.
You can live in one side and have your monthly costs relatively constant. The other side can be rented out to greatly help with the overall cost of the purchase, your property taxes, insurance, and maintenance costs. You receive the interest write off on the residence portion that you live in and you get even more tax advantages on the rental side as investment or rental property. A single family home is not nearly as affordable and does not give you as many options. The vacancy factor in the Bay Area is practically non- existent. You will have no problem renting out the side that you do not live in.
A duplex home will give you faster equity build up.
As time goes by, the rental income will increase. You always have the option to continue residing at the property, or you can borrow against it and with other savings purchase a single family home or another duplex.
A duplex home gives you a great rental property for the future.
If you move to a new residence, you then rent out the unit you were living in, converting the property to entirely income producing real estate and realize even more income, and additional tax shelter.
There are many exciting advantages to owning a duplex.
You should always consult your certified accountant before you invest in any real estate.
Eric Ruxton and Larry Aikins are the owners of Terrace Realty Inc. and Terrace Associates Inc., in Redwood City. Terrace has been in business for over 50 years and in addition to being an independent Brokerage Company, also owns and operates rental properties.