For some homebuyers, the first home doesn’t have to be a traditional single-family house.
A duplex can offer another approach: purchase a property, occupy one unit as your primary residence and potentially rent the other.
This strategy is sometimes called “house hacking.”
The rental unit may provide additional income, while you’re simultaneously building ownership in the property. Depending on the mortgage program and the property’s characteristics, qualifying rental income may also be considered during the mortgage process.
However, buying a multi-unit property comes with additional responsibilities.
You’re not only becoming a homeowner – you may also become a landlord. That means considering maintenance, vacancies, repairs, insurance, local rental regulations and the possibility that rental income won’t always be consistent.
Before buying, it’s helpful to look at the complete picture:
What would the mortgage payment be? How much could the second unit realistically rent for? What expenses will the property have? And could you comfortably make the payment if the second unit were temporarily vacant?
For the right buyer, a duplex can provide an interesting alternative to purchasing a traditional home.
Instead of asking only, “How much house can I afford?”, it may be worth asking:
“What types of properties could fit my financial goals?”
Exploring the financing before shopping can help you understand whether a 2-4 unit property should be part of your home search.