Buying a Duplex vs a Single-Family Home

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Eager house hunters frequently encounter all sorts of scenarios they never bargained for. For example, they may fall in love with a home that does not conform to their original wish list. They could become intrigued by a home with a pool, a two-story when they were adamant about a single-story, an unusual floor plan or architectural style. Sometimes, prospective buyers may be faced with choosing between a duplex vs. a single-family home.

There are a variety of reasons that could make a specific duplex suddenly more appealing than a single-family home: it’s in a great neighborhood, the price is better, it has built-in amenities, it’s newer. Now, let’s consider the general pros and cons:

Single-family pros and cons

  • Owning a single-family home means more freedom to do what you want when you want to do it, such as choices in regard to painting, renovating, updating, decorating, landscaping and perhaps throwing a big party. (with a band)
  • Residing in a single-family home is more private than sharing space in a duplex.
  • When you are ready to sell, you will not have to worry about uprooting tenants.
  • You will be solely responsible for the mortgage.
  • Single-family homes tend to be pricier than duplexes, but not always.
  • Most types of conventional and government backed mortgage programs (i.e. Fannie, Freddie, FHA, USDA, VA) can be used to finance owner-occupied single family homes. Some restrictions may apply to multi-family homes, especially if the 2-4 unit property is being used as a second home or rental property.

Duplex pros and cons

  • Since one side will be rented out, you’ll share the burden of the mortgage.
  • Depending on the rental agreement, other tasks may be shared as well, such as home and yard maintenance. However, this is often the sole responsibility of the owner.
  • As an owner-occupied property, there is a built-in neighbor who can take care of things when the owner is away.
  • If the duplex is in a resort area, it may be a very lucrative, in-demand rental.
  • It could be rented to a close friend or family member.
  • Should it be vacated, the homeowner would be responsible for a larger monthly house payment.
  • May not be available for 100% USDA financing. Please consult with a licensed mortgage professional in your area for verification.

Prior to making any real estate investment decisions, we recommend that you consult with a real estate professional, a mortgage broker or lender, a financial advisor, and tax a tax professional.

Other Resources:

How Buying a Duplex Can Save You Money – Bankrate.com
Freddie Mac Information on Multi-Family Houses – FreddieMac.com
Where to Look Up Conforming Loan Limits – FannieMae.com
Multi-Family Home Financing Requirements – eLEND.com
Duplex Design Ideas – Houzz.com

Lisa is a cost-cutting, money-saving, life-simplifying guru, ready to share her secrets and the tricks up her sleeve. As a mother to a teenager and a twenty-something, avid surfer, and world traveler, Lisa knows how to live the good life on a budget. She covers topics that help us let go of wasteful and costly habits, and embrace those that do our wallets, our bodies, our families, and our planet some good!

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