Triplex Duplex For Sale (2024)

FAQs

Is owning a triplex worth it? ›

Investing in a triplex, a multi-family home with three separate living units, offers several advantages for real estate investors. As a multifamily property, a triplex generates higher rental income than single-family homes or duplex apartments, enhancing an investor's cash flow.

Investing in duplexes may not earn the returns that townhomes and condo complexes earn, but they do present greater opportunities than single-family properties. Often, buying a duplex costs the same as a single-family dwelling, but you have two units to rent out instead of just one.

Is it profitable to own a duplex? Because a duplex usually does not come with HOA fees and consists of two rentable units, it can be profitable. A duplex also might be more appealing to renters than apartments are. And maintaining a duplex costs less than managing two individual rental units.

A duplex can be evaluated in the same way that investors value apartment buildings. The rental income and expenses for both rental units should be combined to determine the Net Operating Income (NOI). Investors can then apply an appropriate cap rate to the NOI to arrive at a valuation.

Cap rates range anywhere between 4-10% , but this depends on where we are in the market cycle, geographic location, condition of the property, and the balance between supply and demand in a given area – typically, you want to see higher cap rates in areas with less rental property demand, but every situation is ...

You might run into financial issues if one unit sits vacant for a period of time. Furthermore, if you're buying a duplex with the intent to live in one unit but rent out the other, you might run into noise and privacy issues. Any time you share walls, you take on the risk of having a noisy neighbor.

Renting out both units will produce monthly cash flow. And if you've taken the time to do your homework and snagged a great deal, it's likely the combined rent from both tenants will cover the entire mortgage and then some. This makes owning a duplex, potentially very lucrative.

In general, buying a duplex will cost less than a stand-alone single-family home in the same area. And it might be cheaper to buy a duplex than build one, although you can customize new construction. Then there are people who convert a single-family home into a duplex. That could cost $80,000 on average.

How to make money off of a duplex? ›

A duplex is a great stepping stone for anyone looking to invest in real estate. While you live in half, you can pay down your mortgage. Then, when you move out, you can rent out both sides — doubling your rental income. Rent goes up.

Owning multiple rental properties can help investors reduce risk through portfolio diversification. The snowball effect describes how real estate investors use cash flow from one rental property to purchase multiple properties over time.

More Expensive To Own: Unlike single-family houses, buying multi-family properties usually requires larger sums of money. Besides this, you must first pay for legal documents like deeds, mortgages, leases, and other relevant documents required for purchasing real estate.

Tax benefits. Fourplexes have lower property taxes than four separate single family rental properties, making them a profitable investment. A fourplex can generate the same or more cash flow as four single-family investment properties, or three if the owner lives on-site.

Multifamily property is considered a relatively “safe” investment compared to other real estate asset classes. That's because even during an economic downturn, people need somewhere to live. In fact, during a recession, many people find themselves forced to sell their homes and move into rental housing, instead.