If you’re thinking about buying a home in Sterling Heights or elsewhere in Macomb County, you may not have considered purchasing a duplex – but doing so could be a good investment. This guide explains the benefits of buying a duplex (not the least of which is generating passive income).
Should You Buy a Duplex for Your Next Home?
Duplexes come with a number of benefits that other types of residences don’t offer, making them an attractive option – particularly for first-time homebuyers.
For starters, if you’re taking out a conventional mortgage to finance your duplex purchase, you may qualify for a higher mortgage amount than you would for a single-family home. That’s because lenders take into account the potential rental income from the other unit when considering your application.
Additionally, living in one side of the duplex while renting out the other can provide you with a great source of passive income. And if you ever decide to move out, you can simply rent both units and continue to earn income from your investment.
Of course, there are also some potential downsides to buying a duplex that you should be aware of before making a decision. For example, if you’re living in the unit that you rent out, you may have to deal with noisy or disruptive tenants.
You’ll also be responsible for maintaining the property, including any necessary repairs or renovations. And if your tenants don’t pay their rent on time, you may have to use your own money to cover the expenses – which can impact your ability to make mortgage payments.
Are There Tax Advantages to Owning a Duplex Home?
In addition to the potential financial benefits of owning a duplex, there are also some tax advantages to consider.
For example, you may be able to deduct the interest on your mortgage as well as any property taxes you pay from your income taxes. You can also deduct any expenses related to maintaining and repairing the property. And if you eventually sell the duplex, you may be able to take advantage of the capital gains exclusion – which allows you to exclude up to $250,000 (or $500,000 for couples filing jointly) from your taxable income.
Of course, you should always consult with a tax professional before making any decisions about how to structure your ownership.
Should You Hire a Property Manager if You Buy a Duplex?
If you buy a duplex, you may want to consider hiring a property manager. A property manager can handle the day-to-day tasks of being a landlord, including screening tenants, collecting rent, and dealing with repairs and maintenance. This can free up your time so that you can focus on other things – like enjoying your passive income.
Of course, hiring a property manager also comes with some costs – typically 10% of the monthly rent. So you’ll need to weigh the pros and cons of doing so before making a decision.
How to Find a Duplex for Sale in Macomb County
The first step in finding a duplex for sale is to work with a Sterling Heights real estate agent who specializes in investment properties.
They’ll be able to help you find the right property and negotiate the best price possible. And if you’re planning on living in one of the units, they can also help you find a tenant for the other unit.
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