A duplex is a kind of housing system that has more than one dwelling place with separate entrances for each of the houses. Duplex houses are not apartment blocks, but just homes that have either a common wall or are built on top of each other. If you own a duplex, a good idea will be to rent one portion out, in fact, if you are a first time investor in real estate and wish to begin a rental business, a duplex can be a good starting point.
Tenants as neighbors: Pros and cons
- You are well aware of the area and can use the local expertise in running your business like knowing where to get and who to call in case of emergencies.
- Having the tenants as the neighbor means you will always be around, this keeps the tenants in check as you can monitor the property without being too intrusive.
- You can get to know your tenants; this works both ways and if you like to keep your tenants strictly as your client and not get friendly with them, it may be an issue.
- Value appreciation is quicker over the years for a duplex when compared to a large single house.
- A big disadvantage of a rental duplex will be that when it is empty, and even if that is only for a few months, you will be paying mortgage, utility bills and other upkeep related bills for a large two house building and that can pinch your pockets.
Apart from these points, there is the issue of privacy, especially if you share a wall. So if you are in the market, look for tenants that you will be comfortable with and you can make a profitable business by renting out part of your duplex.