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Duplex: Your Home, Your Investment, or a Mix of Both

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Duplex- Owning for PPOR or Rental

If you’re looking for a property that can provide you with both housing and income, a duplex may be a great option for a home buyer. Owning a duplex can come with many benefits, such as tax breaks and increased security. However, there are also some risks associated with this type of purchase. In this article, we will discuss the pros and cons of owning a duplex so that you can make the best decision for your unique situation.

What is a Duplex?

A duplex is a specific property that has two separate living units. These units can be rented out to tenants, or they can be used by the owner and their family. Duplexes are popular among property investors because they can provide a steady stream of income, and high income and they are also a good choice for owner-occupied housing.

In order to qualify as a duplex, the property must have two separate living units. The units can be attached or detached, but they must be completely self-contained. This means that each unit must have its own kitchen, bathroom, and sleeping area. In addition, the units must be able to function independently of one another. For example, if one unit is damaged by a fire, the other unit should still be able to be occupied.

Duplexes can come in a variety of different styles and sizes. The most common type of duplex is a two-story property with one unit on each floor. However, there are also duplexes that have units that are attached side-by-side or even stacked on top of each other. The size of the duplex will depend on the number of units and the layout of the property.

There are a few key points to consider when deciding if owning an owner-occupied duplex is right for you. First, it’s important to understand the tax benefits that come with this type of purchase. In many cases, you can deduct the interest on your mortgage and other expenses from your rental income, which can help to reduce your overall tax burden.

Please note, that you cannot claim tax benefits if you live in it. Duplexes also come with some risks, such as higher maintenance costs and potential legal issues with your neighbours. It’s important to be aware of these risks before making a purchase and to have a solid plan in place for how you will deal with them if they arise.

The pros of owning an owner-occupied duplex:

-Duplexes come with many benefits, such as tax breaks and increased security.

-In many cases, you can deduct the interest on your mortgage and other expenses from your rental income, which can help to reduce your overall tax burden.

-Another benefit of owning a duplex is that you can live right next door to your investment property. This can help to reduce vacancy rates and makes it easier to keep an eye on your property.

One of the biggest benefits of owning a duplex is that you can maximise the use of the space on your land. By living in one half of the duplex and renting out the other, you can generate rental income to help offset your mortgage payments. This can be a great way to build equity in your property while also reducing your monthly housing costs.

The cons of owning an owner duplex:

-You cannot claim tax benefits if you live in it.

-Duplexes also come with some risks, such as higher maintenance costs and potential legal issues with your neighbours.

-Although duplexes come with a number of benefits, it’s important to note that they do not grow in value like a free-standing house.

-Maintenance or changes to the external property will need your neighbour’s permission if you only own one side

The pros of owning a duplex for rental:

-Duplexes are a great source of rental income.

-Duplex are generally higher yielding

-They are easy to manage and maintain.

-Duplexes offer more privacy than other types of rental properties, such as apartments.

-Duplexes can be a good investment because they tend to appreciate in value over time.

-May increase your borrowing power and borrowing money

The cons of owning a duplex for rental:

-You may have difficulty finding tenants who are willing to rent both units.

-You may have to deal with noisy or disruptive tenants.

-If one unit is vacant, you will still have to make mortgage payments and pay for maintenance and repairs on the property.

-You may have to pay for lawn maintenance, snow removal, and other services.

-You may be responsible for any damage that is caused by your tenants.

-ongoing expenses can be higher

Should you own only 1 side when buying a duplex?

At first glance, it might seem like a good idea to own only one side of a duplex. After all, owning half of the building would mean less responsibility and less financial commitment than if you were buying the whole thing. However, there are a number of important reasons why owning only one side is not advisable.

For one thing, living next to your neighbours could prove to be quite unpleasant. Whether it’s noise from their TV or from parties that go on into the wee hours of the night, having someone so close can be very difficult for some people. Additionally, as an owner-occupier in a duplex, you have no real freedom or flexibility when it comes to making changes or renovations to your space – everything has to be approved by the other side. Finally, even though you may save money initially by not buying out your duplex partner, you may lose out in the long run if your property doesn’t increase in value as quickly or as much.

A duplex can be a way into the property market for some people.

There is no doubt that 1st home buyers more than ever are struggling to get into the market, duplexes offer a way in. This is definitely true – duplexes are typically much more affordable than buying a standalone house. This can be a great option for first-time buyers who are looking to get their foot in the door of the property market.

There is no doubt that duplexes do not appreciate in value as quickly as a standalone house. In fact, duplexes tend to appreciate at a slower rate than most other types of properties. This means you don’t get as much capital growth as a freestanding house. This is mainly because duplexes are not as popular as single-family homes, so there is less demand for them. However, as duplexes become more and more popular, this could start to change.

When buying any property, it’s important to have someone on your side who understands the market and can help you get the best deal. When it comes to duplexes, using a buyer’s agent is especially important. They will be able to help you find the right property have local knowledge, negotiate a good price, and handle all the paperwork for you. They will also be able to give you unbiased advice on whether or not a duplex is the right property investment for you.

Scott from Wealth Through Property is so excited to have posted this blog post. If you enjoyed this post, please leave us a comment below – we would love to hear your thoughts! And don’t forget, if you need help finding your dream home or investment property, be sure to get in touch with Wealth Through Property today.

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