Purchasing a two-family home could be a good investment. You might decide to live in one portion of the of the house and rent the other portion out to supplement part of your mortgage payment, or you could purchase a two-family home as an investment property and place renters in both halves of the house. Ultimately, it's up to you. However, before you purchase a two-family home, make sure you take these things into consideration.
Unless you live in New England, where an abundance of multi-family houses are located, purchasing a duplex might limit your location options. This may not be a good thing if you don't care for the neighborhoods in your area that have a lot of duplexes and you plan to live in one half of the house. In some places, duplexes are located in the more urban or downtown areas where the houses are older and sometimes rent for less. So, before you start searching for a two-family home, you should drive through some of the neighborhoods in your area where duplexes are located to get a feel of the area.
You don't want to purchase a duplex if they aren't very popular in your area. So you need to consider the local rental market. In some places, apartment complexes and condos are preferable. If this is the case in your area, you might be better of investing in a single-family home, apartment building, or several condos.
The popularity of duplexes in your area, the location, and the size of each half of the home determine how much rent you'll be able to charge. If you're renting both sides of your duplex, you need to make sure that the rent you charge for boths sides is enough to cover your mortgage payment, insurance, taxes, and repairs. If you're living in one portion and renting out the other half of the house, you'll need to make sure you can at least rent space out so that the rent covers half of your expenses. After all, if the rent you receive doesn't cover everything with a little bit of money left over, then you're not making a good investment.
Many people worry that they won't be able to finance a two-family home. However, in most cases, you can finance a two-family house using traditional finance options. This means that you don't have to worry about qualifying for commercial financing, which is great if you're a first-time homeowner.
Buying a two-family home is a big decision. After all, it's a major investment. However, as long as you've researched the house you plan to buy, the area that it's located in, and determined that you can make a profit, you can relax a little bit and enjoy the home-buying process.
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