Investor BlogsWhy Is Buying a Duplex the Best Investment Strategy for a New Real Estate Investor? by Nadia Abulatif March 12, 2018February 8, 2019 by Nadia Abulatif March 12, 2018February 8, 2019Buying a duplex has been the ultimate way for making money in real estate for many beginner real estate investors. Keep reading to find out what makes it the best investment strategy in real estate.What is a duplex?A duplex is simply a house that consists of two units with two separate entrances. Therefore, when you are buying a duplex, you are buying a multi-family home that is set for two families to live in.Related: The Advantages and Disadvantages of Buying a Duplex House as an Investment PropertyBuying a duplex as an investment property has proven to be one of the best real estate investment strategies, especially for beginner real estate investors. So, here is our guide to this real estate investing strategy for beginners:Why is buying a duplex a good investment strategy for beginner real estate investors?As a beginner real estate investor, you are wondering why should you go about buying a duplex instead of investing in single-family homes. In fact, there are a few reasons for that:#1. The rental income:Buying rental property is all about the rental income even if you are investing in single-family homes. However, when buying investment property in the form of a duplex, you can double that rental income. So, in this sense, you have one of two options: First, you rent out both units. This way you are sure to double your rental income. Second, rent one unit while living in the other. This way, you can enjoy the rental income while living on your own investment property. Either way, you are making money in real estate, which is your objective from the very beginning.#2. Easy financing:Buying rental property comes with many property financing options. When buying a duplex, you have three great options for property financing: 1) You can get a regular mortgage to buy a duplex. 2) You can get an owner-occupied loan. This is basically the loan you get under the condition that you live on the property. 3) You can also choose to get owner-financing in which you pay directly to the seller instead of paying to the bank. No matter what property financing option you choose, it is all within the reach of your hand.#3. Tax benefits:No matter what types of real estate you invest in, they all come with tax advantages. You, as a landlord, get tax deductions on certain property expenses. However, you should make sure to check with the state legislature in your area. Or, you could search for states with the best tax regulations that apply to real estate investing.#4. A faster way to learn all about real estate as a beginner:Buying a duplex is “the strategy” in real estate investing for beginners. Starting with a duplex, you can get physical experience on becoming a landlord while not risking too much. You will learn all about property management as well as tenants and most importantly, the process of buying investment property.Related: Real Estate Investing For Beginners: How to Find Investment Properties for Sale#5. Pay the mortgage:If you are wondering should you buy or rent a home in order to skip the mortgage payments, our answer is both! Buying a duplex allows you to buy a property to live in while investing at the same time. You buy a home, live in one unit while renting out the other, and, of course, you use the rent to pay the mortgage. What could be a better option than to be able to live in your own property while your tenants are paying for the mortgage?!#6. Buying a duplex is affordable:Buying a duplex is much more affordable than buying a multi-family home with multiple units. Therefore, you won’t have any problems finding the money to invest in a duplex.Reasons why many investors hesitate when buying a duplex as an investment property:Despite all the above advantages of buying a duplex, some real estate investors still hesitate. The reasons are:#1. Tenants:The worst part of buying a duplex is the possibility of having bad tenants. That is, especially, if you choose to live on the property next to your tenants. This is one of the reasons many investors prefer investing in single-family homes instead. However, if you do not think you’ve got the nerves to deal with them, you can always hire a professional property management company that will deal with the tenants on your behalf. Also, a property manager will make sure to run a background check on the tenants before leasing the property. So, really, it is not that big of a deal.#2. Late- night calls:Another thing that comes with buying a duplex is that you have to be available 24/7 in case of any emergencies or complaints. If you do not choose your tenants carefully, expect to receive late-night calls if a faucet breaks! However, just like we said with picking your tenants, you can hire a professional property management company that will also take care of this for you.Expenses to consider when buying a home:Regardless of the types of property you choose to invest in, there are always expenses to consider when buying a home that is a duplex. These expenses must be in your financial plan so that you know what comes in and out of your pocket. Here is a list of expenses to consider when buying a home:#1. Mortgage payments: It is a given that you will have mortgage payments each month unless you pay all in cash. Therefore, make sure you agree with your lender on a monthly payment that you can afford for sure.#2. Down payment: A down payment is also a given when you are applying for a mortgage for property financing purposes. Keep in mind that most lenders require a 20% down payment. However, you could find lenders who accept less.Related: What You Need to Know About Investment Property Mortgage Lenders#3. Taxes: Getting tax benefits does not mean that you don’t pay taxes at all. So, make sure you take that into account and check where tax deductions apply and where they don’t.#4. Utility expenses: The utility expenses include electricity, gas, water and so on.#5. Maintenance: Property maintenance is one of the recurring expenses that you have to expect on a regular basis.#6. Home inspection: Well, of course, when buying investment property, you will have to do a home inspection. Therefore, you should include that in your financial plan as well.#7. Unexpected expenses: No matter what the deal is, there will always be unexpected expenses. For example, a faucet breaks or your tenants cause a damage.#8. Real estate agent’s fees: When buying rental property, you will have to work with a real estate agent. An agent charges a commission from both the seller and the buyer.#9. Property management fees: Keep in mind, unless you decide to do it yourself, you will have to pay a fee to your property manager.Finally, to learn all about investing in single-family homes vs. buying a multi-family home, check out Mashvisor’s blog. Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL DuplexReal Estate Education 1FacebookTwitterGoogle +PinterestLinkedin Nadia AbulatifNadia Abulatif is an experienced Content Writer at Mashvisor. She was a trainee lawyer before switching to writing about real estate. She is currently doing an LL.M. in Human Rights and International Law. 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