Duplexes, Packer wins, bonfires, taco Tuesday, black coffee, or finding $20 on the ground. That’s a list of things to love, but Duplexes stand out in a big way. Duplexes aren’t perfect, but there is a lot to like about them. Many of you likely have one or multiple of these bad boys too. Regardless of where you are at in your real estate investing journey, here are a few thoughts you may be interested in.
Advantages of Duplexes:
Low barrier to entry for the new investor
I’ve asked many investors how they got started. The most common answer I have heard from investors is: “I started with a duplex.” Investors can start here and graduate into a different asset class or stay here like I have for a few years and add to your portfolio. For the new investor duplexes are often a launching pad and can create quite the interesting investing journey.
The “duplex family” has tremendous range
Starting with price, the types of products within this category or “family of duplexes” has tremendous range on what is available. There are so many different vibes a duplex can bring. Some of the common influencing factors include: style, neighborhood, and updates. This can be said for any property, but the 2 unit building is quite unique. Duplexes in Brown County in June and July sold for as low as $114,900 and as high as $489,900. These types of properties bring substantially different projects, goals, tenants, and overall experience. There is so much to pick from within this asset class and you can easily change your strategy within the “duplex family” as well. There isn’t a wrong answer. It’s what’s best for you.
Two units in one transaction
There is something to be said for not having 100% vacancy when you lose a tenant. You also have 2x as many eyeballs on the property and increase the chance of accidents and damage reported… saving you $. That being said, this will also bring 2x the amount of wear and tear on the property. Keep that in mind, and in your analysis. Solid tenant screening as always, is key here. All in all, I like having the security blanket of losing a tenant and at least still having the mortgage covered. Income is the lifeblood of a business, and that’s what each duplex is: a mini business.
Easy to self-manage, or hire on management
Like with most properties, you can choose to do either here, but you can also transition easily from one to the other as well. This allows you to control the asset and help it perform best, while aligning it with your goals. Nuff said.
Easy to rent
Many tenants like duplexes and they generally rent quickly. They don’t offer the privacy of a single-family home, but they also give much more of a neighborhood feel in comparison to a larger apartment building. As long as you don’t buy something with a lot of headaches, you are set up for low vacancy. Side by side duplexes are especially solid here. They feel much more like a single family home, and dealing with lawn/snow is much easier when tenants are responsible for their own side.
Can be sold to two parties
When your time as a landlord comes to an end, your goals, change, and you want to exit, you have two main groups that will look to buy this style of property. 1st the owner-occupied folks that will live in it, and 2nd to the investing crowd. This is a unique feature that sets duplexes apart that I’ll touch more on below.
Easy to obtain financing
Banks like these properties for a many of the reasons listed above. If a bank likes a property, why wouldn’t you?
Bullish On Duplexes
“House hacking” or living in one unit and renting out the other has BLOWN up in popularity. I’m not one to do any huge predictions, but I’m actively betting that duplexes (and real estate in general) will continue to do well as an investment vehicle. The supply of housing is low in Brown County, as well as many other areas. I’d wager that duplexes are going to be part of what many young homebuyers will see as a financially smart and viable option as a homeowner. The middle schoolers I used to teach, will likely be saying “duplexes slap” in a few years haha. This will keep values high, but could also boost values and rents as well.
That’s it out of me for now. The duplex game is a fun one and I surely enjoy it. If you are a new investor, I’d say find your product type, and go all in. That’s what I’ve done with duplexes, and I hope you can find a part of real estate to dive into as well. Run a tight analysis, stay active as an investor, and as always, here’s a firm handshake for betting on yourself. See you around!