You might want to ask, is buying a duplex a good investment? Here’s the truth, investing in real estate is always a good idea. Be it a flat apartment, a duplex, an office space, commercial property or even something as basic as a plot of land. There are so many ways of making a good profit from real estate investments.
A duplex is basically a residential building which is partitioned into two apartment units. These units are however joined together and share a common wall. Â A duplex can be sold as a commercial, residential or multi-family property. It all depends on the purpose for which you are buying a duplex.
Many beginners in real estate see buying a duplex as a good investment strategy. This is majorly because they are given the option of renting out a portion of the house. It is no news that the investment value of buying a duplex in Nigeria or anywhere else in the world is quite high. As a result of the fact that duplexes are luxury homes that can be afforded by high net worth individuals.
People invest in real estate using different strategies. If you are planning on buying a duplex and still sceptical. The goal of this article is to help you explore the different advantages and disadvantages of buying a duplex.
Pros
Rental benefits
As mentioned earlier, by buying a duplex, you just might end up killing two birds with one stone. In that, you have the option of buying a duplex as an investment property. Since a duplex has two apartment units, you can take one part for your family and rent out the other unit. This can generate income for you monthly or annually. If you are investing in real estate for the first times, this is certainly a good idea.
Mortgage advantages
The benefits you get from renting out one area of the building can help with offsetting some part of the mortgage or even pay it off completely. Your rental income can also help you in working towards financial freedom. For instance, if you purchase a duplex and have a mortgage of $900 monthly and you rent out a portion of the house for $700, all you will require is $200 extra to take care of the mortgage every month. Â
Increase in value
Real estate is one of the most traditional forms of wealth investment. Buying a duplex in an opulent neighbourhood with hight increase in property appreciation will guarantee multiplied returns. In most cases, the value of a duplex is not affected by the real estate marketplace as long as the rent value remains unchanged.
Comfort
When buying a property in Lagos or anywhere else, location and the neighbourhood are primary factors to consider. The thought of living in a duplex comes with comfort and of course class especially if it is situated in an upscale neighbourhood. Some duplexes are completely furnished. Having features like landscaped gardens, electronic security, swimming pools and much more.
Cons
Dealing with tenants
If you finally decide on buying a duplex with the aim of making it an investment property by renting out a unit, get ready to deal with tenants. Although not everyone can deal with the stress that comes with some tenants as some of them can be quite troublesome. If you intend to make some good returns from buying a duplex, then you certainly have to deal with tenants
Although one good way of dealing tenants is by starting every rule clearly in the tenancy agreement and ensure they are aware that by defaulting there is the risk of getting a quit notice.
Maintenance and external renovations
This is part of being a landlord. Maintaining the entire building is on you, including the cost. The home staging process is your responsibility as well. This means that you are expected to clean up the apartment properly before putting it out for rent. From maintenance, renovations, repairs, cleaning and other are the duties of a landlord
This is why you should think it properly before deciding on whether or not you want to invest in buying a duplex. The responsibility of being a landlord is not for the faint-hearted. In some cases, problems may arise on short notice and you should be on ground to fix it.
Lack of tenants
This is an important factor to consider when buying a duplex. Most beginners in real estate tend to make the mistake of buying a property without considering the risk of not getting a tenant. Sometimes, it is as a result of where the property is located. It may not be a location with high demand and as a result, may affect the rate at which people search for properties.
Bottom line is, whatever reason it is you are buying a duplex, investing in real estate yields returns in different ways. Investments come with risk, however, consider the pros and cons above and make a decision that works for you. Kindly share your views with other PropertyPro.ng readers
This is very informative. You are helping future homeowners decide as to what to buy because of this article.