Obviously, at the Duplex Doctors, we think owning and investing in a duplex is a great idea. But we get a lot of questions from first-time Minneapolis homebuyers on whether a duplex is a good choice for a first home.
Like all real estate purchases, the pros and cons of a property largely depend on the particular house and your circumstances. However, our team put together some general tips for first-time homebuyers to consider when weighing the option of buying a duplex.
#1 Consideration for Buying a Minneapolis Duplex as a First Home
Have to Be a Landlord
The biggest factor to consider when buying a duplex as your first home is the necessity of being a landlord. You will need to rent out the property, and then handle tenant requests and needs. Finding the right tenant can be a hassle, and if you have a lot of changeover it can lead to gaps in rental income, and require a lot of your time to advertise the opening, interview candidates, give tours, do background checks, and everything else that comes with it.
In addition, once you do rent out the space, you will then need to act as a landlord, including repairing broken items and addressing your tenant’s concerns.
#2 Consideration for Buying a Minneapolis Duplex as a First Home
Extra Income from Rent
Hands down, the biggest advantage of buying a duplex as your first house is the extra money. By renting out the other side of the house, you are getting money back in your pocket every month. This can improve your debt-to-income ratio and can help you pay off your mortgage. Over time, and as you make upgrades to the property, you can increase the rent. This can eventually even cover your entire mortgage payment in some cases. Plus, you can get additional tax deductions. As a landlord, there are additional expenses you can write off on your return.
#3 Consideration for Buying a Minneapolis Duplex as a First Home
Possible Complications with First-Time Homebuyer Programs
If you are planning to utilize a first-time homebuyer’s program to purchase a house, it’s essential to check if a duplex is a qualifying property. In many programs, multi-family homes do not qualify for those programs. However, the long-term financial benefits can outweigh the perks of the first-time homebuyer’s program. Work with your realtor and your mortgage company to ensure you understand all of the details!
#4 Consideration for Buying a Minneapolis Duplex as a First Home
Shared Property – For Better or Worse
As a first-time homebuyer, the idea of sharing the property with a tenant right next to you can seem appealing. If you have a good renter, it can be fun and can make you feel safer having someone close by. However, if you do not get along with your tenant, or if you like your own space, then this can be a negative. Also, if there is an issue that needs to be repaired, then your tenant might come over at an inconvenient time to request you handle the repair as soon as possible.
#5 Consideration for Buying a Minneapolis Duplex as a First Home
Potential Extra Expenses
While getting rent from a tenant is a great boost to your income, you should be prepared to have extra expenses as well. If there is a home repair issue, or if an appliance breaks down, you are responsible for paying for the repairs or the replacement. This can add up! Additionally, in between tenants, you may need to make repairs to the house to fix damaged property or worn flooring, repaint walls, and other tasks to get it ready for the next renter to move in.
Is a Duplex Right For Your First Home?
In conclusion, if you’re considering buying a Minneapolis duplex as your first home, it’s essential to talk to our team at The Duplex Doctors to determine if this is the right choice for you. We can review your current situation, look at potential properties, and discuss the pros and cons of being a landlord.
Call us today to get started!