Buying a duplex lets you live in one unit while collecting rent from the other. It's a smart way to reduce housing costs while building wealth through real estate.
Why Duplex Living Makes Financial Sense
Living in a duplex while renting the other unit can slash your monthly housing costs. Many duplex owners find rental income covers 50-80% of their mortgage payment, making homeownership surprisingly affordable.
You're also building equity in a property that generates income—a powerful combination for long-term wealth building.
Step 1: Get Your Finances Ready
Boost your credit score to qualify for better loan rates and terms.
Save for a down payment. FHA loans require as little as 3.5% down for owner-occupied duplexes—much less than traditional investment properties.
Get pre-approved early. Lenders may count expected rental income (typically 75% of market rent) when calculating how much you can borrow, potentially increasing your budget.
Build cash reserves for repairs, vacancy periods, and unexpected expenses.
Step 2: Find the Right Property
Location determines both your quality of life and investment success:
Target growing neighborhoods with strong rental demand and good schools
Look for proximity to employment centers, public transit, and amenities
Consider condition carefully—move-in ready costs more but generates income immediately
Avoid major fixer-uppers unless you have construction experience and extra capital.
Step 3: Run the Numbers
Before making any offer, calculate your real costs:
Estimate rental income based on comparable properties in the area
Factor in all expenses: mortgage, insurance, taxes, maintenance, vacancy allowance (5-10%)
Aim for positive cash flow or at least break-even after covering your living expenses
The property should improve your financial position, not strain it.
Step 4: Understand Your Dual Role
You're both homeowner and landlord, which means:
Maintenance responsibility for the entire property, not just your unit
Tenant communication and relationship management
Legal compliance with local landlord-tenant laws
Consider whether you'll handle repairs yourself or hire professionals. Factor these costs into your budget.
Step 5: Find Quality Tenants
Good tenants make duplex living enjoyable and profitable:
Screen thoroughly with credit checks, background checks, and employment verification
Create detailed leases that set clear expectations
Understand fair housing laws and your legal obligations
Taking time to find the right tenant saves headaches later.
Is Duplex Ownership Right for You?
This strategy works best if you:
- Want to reduce housing costs while building equity
- Don't mind being a landlord to your neighbors
- Plan to stay in the area for several years
- Have some cash reserves for repairs and vacancies
Getting Started
Duplex ownership offers one of the easiest paths into real estate investing. With low down payment options and strong rental demand in many markets, it's an accessible way to start building wealth through property.
Ready to explore duplex opportunities that could cut your housing costs in half? Let's get you pre-approved and start your search today.