Investing in real estate is a smart move for nearly anyone who is looking to diversify their investments, but deciding on the best type of real estate can be a little more complicated. Duplexes may draw the attention of new investors, but it can be hard to sort out whether you should invest in a single home, a duplex, or other type of real estate. You may find that placing duplex homes for rent can be a steady source of income for years to come. Here are some of the most significant pros and cons of investing in a duplex.
Pro: You Can Live There and Rent the Other Unit
When you are the owner and on-site landlord of a duplex, you can have a place to live while still getting a monthly income from renting out the other unit. That takes care of paying money on rent or another mortgage, while also allowing you to be there for tenants' needs. Since you're on-site, you can also keep a better eye on how tenants are treating the property, and they are less likely to neglect their home when they know the property owner is so nearby.
Con: Your Location Options May Be Limited
When you start looking at duplexes for sale, you will find that your locations are a lot more limited than they would be for a single-family home. That's because duplexes just aren't built in as many different locations as typical suburban neighborhoods with single-family homes. You are likely to find that duplexes are more common in urban areas, so you may have a difficult time finding a duplex in certain areas that you may want to buy property in.
Pro: Tax Deductions Are Available
When you own a duplex, you will be eligible for certain tax deductions that can save a lot of money. The deductions that you can take for duplexes include depreciation, losing money, at least part of your mortgage interest, property taxes, and certain expenses of ownership. Be sure to keep a log of expenses and all receipts related to the costs of owning and caring for the duplex.
Finally, keep in mind that a duplex is an overall good investment for most landlords, but it's important to assess the ins and outs of buying a duplex to see if it works for your unique situation. Be sure to ask your landlord any questions you have about duplexes in your area and make a list of must-have criteria that you want in a duplex before assessing the local real estate scene. Contact a company like CJ Real Estate, Inc to learn more.