How to Make Money with a Duplex

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A duplex can be a moneymaker for you if you are careful about which duplex you buy and manage it carefully, with a long-term plan in mind. Most people who buy duplexes with the intention of making money plan to live in one-half of the duplex and rent the other. This is a reasonable plan, as long as you can find a tenant who pays his rent on time and is an easy neighbor.

Flip It

  • Buy a duplex that requires maintenance and repairs for less than market value. Be sure that you know how to do these repairs before you buy the duplex, or at least that you have contacts with tradespeople who can do the repairs at reasonable cost to you.

  • Renovate the duplex to increase its market value and make it more attractive to buyers. How much renovation you do will affect how much you spend, but will also increase the profit margin between what you spent and what you will make. Repairs can range from simple painting and landscaping to major repairs such as roof replacement and foundation work.

  • List your newly renovated duplex on the real estate market with an agent you know and trust. Determine your selling price by adding together what you paid for the duplex, what you spent renovating it (including wages for hired workers) and how much you want to make in profit. These three factors will determine the selling price.

Rent Out Half

  • Buy a duplex, live in one half of it and rent the other half to a paying tenant. If the cost of the duplex is fairly low, the mortgage is long-term with low payments and you get a decent rent for the other half, you should be able to cover your mortgage payments with your tenant's rent.

  • Renovate things that require fixing while you are living in the duplex. Over a span of several years, you should be able to simultaneously increase the condition and value of the duplex and decrease the amount that you owe on it.

  • Sell the duplex and pocket the profit. At the point when you sell, all the rent that you collected from your tenant and put into mortgage payments will come back to you.

References

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