What Is A Duplex? The Pros And Cons, Plus Tips For Buying One

If you’re in the market to buy a new home, you may be considering a few different types of properties. Living in an apartment may not be the best option if you’re looking for amenities like yard space yet you may not be ready for the upkeep that comes with owning an entire property.

You may be able to achieve the best of apartment and single-family house living by buying a duplex. As you prepare to buy a house, it’s essential to compare popular house styles, especially if you’re considering buying a duplex. Read on to learn more about what a duplex is and why it could be the perfect option for your new home.

What Is A Duplex?

A duplex is a multifamily home that is divided into two separate units that both have their own entrances and addresses. The two single-family homes are either side by side and share a wall or are on different floors.

While twin homes also have two distinct units that share a wall, they differ from duplexes in that they are split into two separate lots and thus are considered two independent properties. Like triplexes that possess three different units and fourplexes that have four, duplexes are confined to a single lot and considered to be a single property despite being occupied by two distinct tenants or families.

Theoretically, these entrances enable residents to enjoy privacy despite the proximity of their neighbors. Although it has two separate units, a duplex is usually owned by a single entity.

The style of a duplex can vary based on location. For instance, in San Francisco, California, duplexes are connected by a shared wall whereas in New York City, it is more common for duplexes to be connected vertically through stairs or an elevator, with one unit above the other.

Types Of Duplex Homes

If you’re interested in purchasing a duplex, it’s important that you determine which type of home works best for your lifestyle. The following are common styles of duplex realty:

• Ground: Built on the ground floor of an apartment, the ground duplex is preferred by homeowners who enjoy gardening or have children or pets. In this setup, the lower floor of the duplex overlooks the front yard and houses the bedrooms, while the kitchen and living room are located on the upper floor.
• Standard: The standard duplex is the most common duplex house design. A standard duplex has two floors, built vertically, one over the other. The kitchen and living room sit on the lower floor, while the upper floor houses two bedrooms or a single bedroom with a children's room.
• Low-rise: Although less common than ground and standard duplexes, the low-rise duplex is a state-of-the-art modern duplex that can be challenging for architects to design. The square footage of a low-rise duplex tends to be smaller than other duplexes, which owners exchange for the duplex’s grand balconies on the top floor.
• Half duplex: A half duplex refers to one side of a duplex. Half duplexes can be one above another and connected by stairs, or side by side and separated by a common wall. Half duplexes are owned by different owners.

Duplex Houses Vs. Other Multiunit Properties

Duplexes are only one type of multifamily house. Here’s how to tell the difference between a duplex and other types of multifamily houses. 

Duplex Vs. Condo

A condominium may look more like a home than an apartment complex, but like a duplex, it is physically connected to at least one other unit. Condos are known to offer more shared common spaces than duplexes such as a pool or a fitness center, and have different rules when it comes to ownership. When you buy a duplex, you not only own the unit but the entire structure, and land it’s built on, where a condo owner technically only owns the inside of the building, while the structure and exterior are maintained and managed by another person or group. Condo owners are also required to join a homeowners association and adhere to its guidelines, while duplex owners are not typically required to be members of similar associations. 

Duplex Vs. Apartment 

An apartment building consists of five or more independent living spaces with common areas and amenities accessible to everyone in the complex. Like duplexes, apartments have shared walls and floors. However, duplexes are significantly different from apartments because apartment tenants pay rent and never own the apartment. As a result, they have little control over renovations or updates and need landlord approval to make any changes. With this comes less responsibility than duplex owners, as they are not liable for any issues.

Duplex Vs. Townhouse 

A townhouse is very similar to a duplex, as they are both separate living spaces that share at least one wall with each other. Most townhouses share two walls with a neighbor on each side, while duplex residents typically only share one wall or floor/ceiling. Additionally, townhouse owners often have their own private yard, while duplex owners share common areas, including outdoor space. Both duplexes and townhouses are responsible for property maintenance, but townhouse owners are more likely to be required to adhere to homeowners association fees and guidelines.

Pros And Cons Of Buying A Duplex

Now, there are a few advantages and disadvantages you should consider before purchasing a duplex.

Duplex Pros

Affordability: The most significant benefit of duplexes is their affordability. Generally, duplexes are less expensive than single-family homes, making them an excellent access point for homeownership. Of course, the financial benefit depends on the state of the property, cost of repairs and, if you’re renting, the neighborhood’s rental market.

Rental income: The fact that you can gain both a primary residence and investment property (or two investment properties) by purchasing a single home is a considerable advantage for first-time home buyers and investors alike. By renting a unit to a tenant, a duplex owner can gain a significant revenue stream that will enable them to pay off their mortgage faster.

Tax breaks: If you decide to rent out the other half of the duplex, you may be eligible to write off a portion of your property taxes, mortgage interest and even maintenance costs for the rental unit. Talk to your accountant to ensure you’re set up for success.

Duplex Cons

Shared spaces: If you’re looking to own your own property, you may find it frustrating to have a neighbor living so close to you. You’ll most likely have to share a driveway and yard with the tenant renting the other unit, so you must make sure you’re comfortable sharing these common areas. In fact, writing down a list of your nonnegotiables and advertising the property as such will help weed out any folks who are incompatible with your lifestyle.

Landlord responsibilities: Furthermore, there are many responsibilities that come with being a landlord. It’s recommended to seek legal advice to ensure you’re keeping the property up to federal, state and municipal codes. If you’re not ready to take on these responsibilities, a duplex may not be right for you.

Investment property expenses: It’s a significant step to become an investment property owner. Like any other investment property, you should expect to save a hefty emergency fund in case:

• The rental unit becomes vacant between tenants.
• You need to make expensive repairs to bring your rental unit up to code.
• You need legal advice to remove problematic tenants.

Is Buying A Duplex A Good Investment?

Owning a duplex isn’t for everyone however if you’ve weighed the pros and cons above and you want to buy a duplex as a real estate investment, there are quite a few ways to make duplex ownership work for you.

First, duplex owners can rent out half of the duplex. Known as a form of house hacking,  home buyers can benefit from living in one half of the duplex as an owner-occupant and renting out the other half to enjoy an income stream that they could use to pay off their mortgage. If you choose to do this, you’ll need to legally and mentally prepare for becoming a landlord and homeowner in one fell swoop. By living in the unit, landlords benefit from being close to their rental property and tenants have landlords that are readily accessible to make repairs.

You can also buy a duplex as purely an investment property and rent out both units. This buyer should already be financially prepared for maintenance costs and other property expenses.

Additionally, you can purchase the duplex with a friend. You may be able to make a higher down payment, enjoy smaller monthly payments and live side by side with someone you already know. This option also helps resolve the possibility of not getting along with tenant neighbors, especially if you’ve lived as housemates already.

Finally, duplex owners can share the property with their loved ones. There are numerous possibilities here, all of which are personal choices. Multigenerational homes are on the rise, with duplexes, triplexes and attached family units (also called accessory dwelling units, or ADUs) being the main facilitators of interdependent living. Duplexes can be great for keeping aging relatives close while everyone maintains their independence. 

Tips For Buying A Duplex

Whether you’re buying a duplex to live in as your primary residence or you’re investing in real estate, it’s important you’re prepared for the buying process. The advantage of purchasing a duplex that you plan to live in is that you have more options when it comes to getting a mortgage.

FHA and VA loans provide qualified borrowers with the ability to put less money down on the home. However, these loan options must be used for primary residences. If you purchase the duplex as an investment property, you will have to make a down payment of at least 25% of the purchase price.

If you’re going to live in a duplex as your primary residence, a conventional mortgage is the most common choice. For investment duplex properties, there are different down payment requirements to consider.

The Bottom Line

Duplexes are a great choice for housing because of their versatility and affordability. The ability to purchase two units for the price of one makes duplexes extremely appealing. However, it’s crucial that you do your research and consider your needs before deciding to move into one.

If you’re ready to buy a home, whether it’s a duplex or another style more suited for you,  take the first step toward home ownership and start the application process today.