If you've always wanted to be a landlord, you may be considering getting into the industry by buying a duplex. You can live in half and rent out the other half! Indeed, this is the way that many homeowners initially venture into landlordship, but it's not for everyone. Consider these pros and cons of this situation before you buy that duplex.
Pro: You'll have money coming in to pay the mortgage.
Living in half of a duplex and renting out the other half allows you to own a home without having to come up with the full mortgage amount every month. The amount you charge in rent should cover at least half the mortgage—and in most cases, much more than that. This frees up some of your cash for other investments.
Pro: You don't have to take care of an extra property.
You'd have to mow the lawn, clear the sidewalks, and landscape around your own home anyways, so you don't have to put forth much extra effort to maintain the grounds for your tenant. This would not be true if you were to live in one home and rent out a second one on a different property.
Con: Your tenants are right next door.
While this can be convenient when it comes to collecting the rent check and touching base with your tenants, it can also be annoying. You don't have as much privacy, and if your tenants end up being people you don't particularly like personally, having to see them all of the time when you're home can become challenging. If your tenants lived down the street or across town, you'd only have to see them occasionally.
Con: You'll have to be extra careful when screening tenants.
When your tenants live right next door, they learn all about you as a person. They know what kind of car you drive, when you leave for work, who your family members are, when you stay out late, etc. While it's never a good idea to rent to someone who isn't trustworthy, this is even more important when your tenants live right next door to you. So you'll have to be extremely thorough in your screening process, do a very thorough background check, and only rent to people you are one hundred prevent confident are trustworthy, safe, and respectful. This may result in more vacancy months between tenants, which translates to lost income.
If you don't mind spending time searching for the right tenant, moving into a duplex can be an affordable way to live and enter landlordship. Just make sure you're prepared for the challenges that come along with this endeavor. Contact a realtor for more advice on whether you should make this investment.Share