Duplex & Multi-Family Homes Blog | Investment Property News

Many investors view buying a duplex as a big step in their investment strategy. You are moving from single-family properties to having multiple tenants. While there are definite differences between these types of properties, they also have similarities.

However, if you compare a duplex to two single-family homes, managing the duplex is simpler. The most obvious difference is that you will have two units on the property instead of one. That can mean two rent checks but also two tenants to manage.

What are some of the ways duplexes are similar to single-family homes? Read on to find out!

Similarities Between Buying a Duplex and a Single-Family Home

Purchase Price

The average duplex will cost more than the average single-family home.…

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There are many advantages to investing in duplexes. You can have double the rent on one property when comparing it to investing in single-family homes. It is also simpler and more affordable than investing in large multi-unit properties. One point to consider is the financial requirements of duplex investing. Lenders will be stricter and apply different standards. It isn’t necessarily the same as financing a single-family home as your primary residence.

Learn the Financial Requirements

Down Payment

You’ll need a down payment to finance the purchase of your duplex. If the duplex is an investment property, you will likely need a larger down payment than you would for a primary residence. However if you're going to live in the property as an…

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Start Here.

Before we dive into numbers, cap rates, GRM's etc it's important to make sure you are in the correct Duplex Mindset. What does that mean? Read on.

Most people buy a duplex for one reason: To make money. Full Stop - end of story. It might be in the form cashflow, or tax advantages, or renting one half out to offset your mortgage, or capital appreciation (or hopefully all of the above) but it's about making money. You are not buying a home - you are purchasing a small business. The duplex mindset is about seeing your investment in a multifamily property the same way you would see an investment in any other business, and your main goals are to increase revenue and reduce expenses.

Turn off HGTV.

Every dollar you put into your duplex…

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Calculating Cap Rate  

The Cap Rate is a quick way to check the financial outlook of a multifamily investment property. So how do you calculate the cap rate on an investment property? The basic calculation is pretty simple:

Cap Rate = Net Income / Property Value

Cap Rate Example
Let's do an example of calculating the Cap Rate. You’ll need these numbers:

  1. Property Value. Not just the asking price, but what the property is actually worth. Your Realtor can help you determine this number by pulling comps for similar multifamily properties that have sold in the area. For our example let’s say that you’ve found a duplex that is worth $300,000.
  2. Gross Income. This is the gross rent that the owner would receive. For our example we’re going to say that the property is rented…

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