Tips to Own a Duplex in Texas

You can live in one side of a duplex and use the other side as a rental property, an office, or a guesthouse.When most people think about buying their first home, three options typically come to mind: single-family home, townhouse, or condo. But there’s a fourth option to consider: a duplex home. 

Owning a duplex in the State of  Texas especially in Dallas Fort-Worth region has certain perks, like getting you into homeownership with some mortgage and tax advantages. Plus, if you rent out one side, renters can help pay that mortgage. Here’s some reasons why duplexes may be the hot new home type

1.Tax Benefits

You might already know that you get a tax write-off when you buy a home — you can deduct the mortgage interest you pay. If you buy a duplex and live in one side, you can write off only that side. But if you rent out the other side, there are additional write-offs. These could be fees accrued to rent the place out or even manage the property. All are completely tax-deductible and consult a tax attorney for more details on how you can leverage tax benefits owning a duplex

2. There are mortgage advantages

Mortgage lenders typically classify properties into owner occupied and non-owner occupied, and they tend to give more favorable interest rates to people buying a property they will live in. With a duplex, “A mortgage company considers the two units as one property and you can qualify for a lower interest rate if you occupy one of the units.” If you plan to rent out the other side, you might also qualify for a larger mortgage. Most lenders will allow you to include part of the potential rent into your income when qualifying for a mortgage.

3. You learn the landlord business

Being a landlord is a great side business and can provide a way to earn passive income. But there’s a lot to learn, such as how landlord-tenant laws work in your state, how to customize a lease, how to make sure you actually collect rent, and how to screen potential tenants. An excellent way to get started is by buying a duplex, living on one side, and renting out the other.  Why? You live close to your rental property. You can keep a close watch on your tenants to make sure they aren’t doing anything illegal or destroying your home — without invading their privacy. If anything goes wrong, you are just next door.”

Before you get yourself buying into a duplex property and getting into the landlord business, there are some numbers to consider, such as researching what rents are going for in your area. Make sure that when buying a duplex, if only one side is rented, the rent will be able to cover the principal and interest payments as well as the insurance and taxes. 

4. It has great potential as an Airbnb

You can potentially earn more money renting the other side of your duplex through Airbnb or other vacation rental sites than you could by renting it on a traditional one-year lease. Why? Vacation rentals are for short-term stays, so you can charge more. Vacation renters will also pay more for a full apartment than they would when renting a single room in your home. And with a duplex, you can offer the best of both worlds for renters: They get a full apartment with you available when needed, just as you would be when renting out a room in your home. But you need to make sure you can use your prospective duplex. “Airbnb is case by case.

5. A duplex gives you more options

If you don’t need to go into the office every day, a duplex could serve as the perfect work space … and you would beat all your friends when comparing commute times. You also could use the other side as a guesthouse when family or friends come to visit, which is a dream arrangement if you aren’t exactly the entertaining type. The other side of a duplex could also make a convenient place to house elderly parents who need someone checking on them daily — the parents get to remain independent, and everyone gets some privacy.

Joe Goh is a Licensed Texas Realtor with DFWTEXASPROPERTY covering Dallas-Fortworth. For more information, go to www.dfwtexasproperty.com