A Beginners Guide to Owner-Occupying a Duplex

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Now is a great time to purchase a duplex and live in it with your tenants as an owner-occupier. There are so many upsides to it and it is slightly different than just being a property owner. If this is something you’ve considered, take a look at his list so you can have an idea of how many benefits buying your own duplex actually has. Here’s a list of 8 things to consider before you invest in a duplex.

Money, Money, Money

One of the most obvious upsides to living on your own property is that you are able to save any money you would normally be spending on your rent or mortgage. When you’re purchasing a rental property you will also qualify for different loans and rates from your bank based on the fact that you will be living on the site so make sure to mention it to any mortgage broker and your bank. The loan will likely have the same structure and rates as a personal loan but it will allow you to invest in your property so you should make sure to ask your bank if you qualify.

Easy On Me

If this is your first investment property then you’ve made a great choice. The return on multi-family homes is often much higher than buying a few single-family homes and it’s sometimes easier to find them. Your bank is also much likely to give you a loan if you are living on the property because it shows that you are less likely to let it fall into disrepair and default if you are doing equity finances. A multi-family home is one of the easiest investments to make for your peace of mind and your wallet.

Fix it up

Another great plus of living in your rental property is the ability to fix it up much easier. Any repairs or upgrades you want to make to the building, the landscaping, or the unit you’re living in will be much easier if you are there. You can see for yourself what you want to be done and maybe even save yourself some money by taking a DIY approach instead of contracting it out.

Manage It All

If you plan on buying many different multi-family homes for investment properties then you need to get a feel for what building managers’ duties will be. A building manager will commonly do small repairs (or hire someone to do them if they’re unable to), collect rent and keep the property in the best shape possible, sometimes in exchange for their rent if they live on site. If you can get a grip on doing these duties yourself then you will have a better idea of what to expect from any building managers you hire or contract in the future.

Flip It

Some areas have different laws and different rules from your bank as far as occupying but you usually need to live on your rental property for at least a year (while also legally making it your primary residence) to move out and rent the unit you just vacated. Make sure you check with the laws in your area and your bank before you move in and out because there are major fines and legal issues that come into play if you try and turn it over too quickly.

via:pixabay

You will also need to look into the rental laws in your area to see when you can raise the rent of your rental units. It’s great to keep upgrading them as you go but if you are unable to reap the benefits of your investment for another few years then it might not be worth it.

Tax Time Help

You may also qualify for more deductions than you previously qualified for if you’re an owner-occupier. You will be filing your taxes as both a homeowner and a building owner so if this is your first year, it’s good to get a professional who specializes in property ownership. If there are any expenses that you happen to share with your tenants (dumpster fee, snow removal, or landscaping for example) you may be able to split these costs on your tax return.

Location, location, location

Duplexes are often older homes that have been split into two units at some point by the previous owners which usually means they’re in great areas and gorgeous neighborhoods. You can offer a higher rent for duplex units that are close to amenities, shopping and especially schools which means you’re able to capitalize on the location. It will be very easy to find good renters if your property is in a location that’s great for everyone.

Final Considerations

Before you invest in a multi-family unit you need to consider whether or not you’re up to the work it will entail. Ask yourself a few questions before you make your final decision.

• Am I looking to make or save money?
• Am I looking for a property to turn over quickly?
• Am I looking for a property to keep in my investment portfolio for a long time?
• Am I able to take on the responsibilities of repairs and maintenance?
• Am I able to keep great records of expenses and rental income for my bank?
• Am I willing to live with my tenants close by?
• Do I want a property I can improve or one that’s already in good shape?

There are many things to consider before you decide to invest so make sure you cover all your bases before you take the plunge. If you’re still interested in investing then look for a property that suits your wants and needs. If you make the right choice, you end up with a property that will give you a great return while giving you a great place to live at the same time.

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