Traditionally, when most folks imagine buying their first home they think of three options – a single-family house, a townhome or a condo.
Did you know there’s a fourth? A duplex is a home divided into two sets of living quarters with separate entrances. While it might not be what first comes to mind, owning a duplex offers some significant advantages.
4 Pros of Owning a Duplex
When you’re purchasing a home – whether it’s a single-family home, townhome, condo or duplex – lenders will classify it as either owner-occupied or non-owner occupied.
Owner-occupied homes are considered less risky. This is because the likelihood an owner will walk away from their mortgage when they physically live in the home is reduced. As such, you’ll typically secure a lower interest rate for an owner-occupied unit.
The great news is, lenders consider a duplex one property. If you plan to live in one half and rent the other, a lender will still consider the property as owner-occupied.
In general, buying a home gives you some significant tax write-offs, such as deducting your mortgage interest. In the case of a duplex, if you’re only living in one half you can only write-off the interest on that one side. However, if you rent the other side there are other tax write-offs of which you can take advantage. This could include any repairs or updates you make to the space. If you share expenses like the Internet, cable or garbage, you can also write half those off.
By renting the other side, you can help cover the cost of your mortgage. As property values rise, your rental rate will typically rise too. Once you’ve paid off your mortgage, those monthly rent checks will become a supplemental income.
Ready to explore your options? The first step is to get pre-approved, contact me today and let’s get started.