If you are starting to think about buying your first home, one option you might be considering is buying a duplex. With this type of setup, you could live in one unit, and you could rent out the other unit. Buying a duplex can be a great way to make real estate more affordable, but there are also a few small drawbacks to consider before you take the plunge and buy this sort of property. Take a look at the pros and cons to ensure you make an educated decision.
Pro: You can probably cover your mortgage with rent.
By renting out the other side of your duplex, you can probably get enough rent to pay your mortgage payment each month. People will typically pay more to rent an apartment in a duplex than in a larger style of multi-unit building since they will have more privacy. Look at what other duplexes in the area are renting for and compare this to the mortgage payment you would have. You'll probably be surprised how much rent you can actually earn — and having your mortgage covered each month certainly gives you financial stability.
Con: You'll have neighbors close by.
When you rent out the other half of your house, you will have to get used to having neighbors so close by. Noise can travel. If they are up late having a party or playing music, you might hear it. Similarly, you will need to be cautious about your own noise level to avoid disturbing your tenants.
Pro: It's easy to collect rent and stay on top of repairs.
If you plan on buying a rental unit anyways, buying a duplex is probably the easiest way to do it. You won't have to drive to collect rent, and you can easily keep an eye on the building to know when repairs need to be completed. This can save you time and money.
Con: Parking and sharing a yard can be a pain.
Depending on the layout of the driveway, you may struggle to share parking with your tenants. Someone may have to park on the street, or you may need to widen the driveway so you're not constantly having to figure out who needs to park in the front. Similarly, sharing a backyard can get a little cumbersome. You will have to check with each other before hosting barbecues and the like.
Buying a duplex can be a great way to break into the real estate investment world. Talk to a real estate agent to learn more about these pros and cons.