4 Reasons Your First Home Should Be A Duplex

Most of the time, when people buy their first house, they would choose a detached house. And if they could afford it, they would look for a mansion.

Have you ever considered about purchasing a duplex?

You can find various duplexes on the market. That is a wise investment. It is especially true if you are still young and living alone.

With it, you can live in one half of the house and  rent out the other. As you build up better equity, the rent will cover the cost of your mortgage, allowing you to use other people’s rent money to work for you.

If you’re still not convinced, here are some reasons why your first home should be a duplex.

1. Qualify for a loan easily

If you have a hard time qualifying for a home loan, try getting a duplex instead. Lenders will utilize the income from the duplex for rent unit to assist your debt-to-income ratios when they assess your application. Through the improved rental income, you may qualify for a high-priced property.

Apart from qualifying for a loan easily, lenders may give you a larger mortgage. The reasoning behind it  is that they would consider the potential income coming from the rental unit. If you are an owner-occupant, you are likely to get low-down payment options the same way you would with a single-family home.

For instance, if your mortgage is $1,800 a month and you rent out the other half for $1,000, you get 55 percent of your mortgage covered. It helps you save money while you build your equity quicker.

2. Generate more income

If you move out and rent the whole property, you can generate more revenue than having a single family home. A duplex has stronger cap rates than a single family home when it is rented out. That said, a duplex is a wonderful first home, and it allows you to build a better real estate investment portfolio than a single family home.

3. Offers more potential as an Airbnb

If you wish to earn more money, you may rent the other side of the house through vacation rental sites, like Airbnb. You can charge more for vacation rentals because they are for short-term stays. Renters will have the best of both worlds because they get to use a full apartment.

4. Gives you an ideal first step to become a real estate investor

A duplex will provide you with a crash course on how to be a landlord. That is if you are planning to become a real estate investor  in the long term.

You may hesitate to become a real estate investor because of the risks and challenges of this occupation. However, when you have a duplex, you can be both a property manager and a homeowner at the same time. But before you rent out the other half of the house, you should learn the laws in your state regarding  landlord and tenant relations. You must also acquaint yourself with the complexities of leasing procedure.