A duplex is one of the most popular investment property styles for a variety of investors. This article describes this type of real estate, its benefits, and why a landlord would sell their property.
What is a Duplex?
A duplex is a multi family home that provides two separate living spaces and entrances for two families. A duplex could be two story houses having a complete apartment on each floor or side by side apartments on a single lot that share a wall. Oftentimes, the floor plans will mirror each other.
What is the difference between a duplex and an apartment?
The main difference between a duplex and an apartment is the ownership. A duplex has one owner who owns the entire building and typically lives in one unit and rents out the other, or rents out both units and lives somewhere else.
An apartment is a unit within a multi family building with many units (sometimes hundreds) rented out to tenants. All units are owned by a group of investors, a corporation, or a single person.
Living in a duplex is a similar experience to living in a single family home. A duplex provides more privacy than living in a traditional apartment building or apartment complex, however, it usually has less amenities than a Class A or Class B apartment.
Benefits of Owning a Duplex?
Live in Your Duplex
Duplexes are a great way for investors to get experience as landlords because it’s easier for them to manage personally. Many people throughout the United States see the investment value of buying a duplex to live in one unit while renting out the other (a.k.a. house hacking) to reduce the cost of home ownership. If the landlord lives in one duplex unit and rents out the other, it makes the property management easier.
There are also many tax benefits involved with owning a duplex as an investment property. If you live in one of the units, you will receive the same deductions homeowners receive on their properties. When you own a duplex as an investment, you can also deduct many expenses, including tenant screenings, repairs, marketing and advertising, insurance, and any maintenance fees. Duplex owners can also benefit from depreciation on their property, which will give you a tax break on your property’s rental income.
Reasons Why A Landlord Would Sell Their Duplex?
Bad tenants can cause landlords many headaches and thousands of dollars in legal fees and repairs.
Foundation issues, electrical, HVAC, plumbing, flooring, appliances, and more. Repairs can easily wipe out your investment profitability.
Tired of Being a Landlord
Many landlords want to retire and focus on other interests and hobbies without having to worry about repairs, bills, and tenants.
When you sell a duplex that you occupy, you can gain more benefits than when selling a rental-only duplex. Rental properties are subject to capital gains tax and depreciation recapture tax when they are sold. The IRS will treat your investment as two properties, only half of your duplex sale proceeds will be subject to taxes!
The Types of Duplexes We Buy
We typically look at duplexes at least 15 years old and in need of renovations, repairs, and overall TLC! It doesn’t matter the situation, or the condition your property is in, contact us for a free cash offer!
Where Do You Buy Duplexes?
We buy duplexes all throughout Texas! Simply fill out the form below to get started.