Prospective real estate investors shouldn’t overlook duplexes. Here’s how to find a duplex for sale and why this is a good idea.
Why Buy a Duplex?
A duplex for sale presents a unique opportunity for real estate investment. It’s still small enough to qualify as a residential property, which makes the buying process simpler than if you were working with a commercial unit.
If you choose to live in one of the units, you could qualify for an FHA loan to buy the property. This type of loan allows you to purchase an investment property with little to no money down, but the catch is that the property must be owner-occupied for at least a year. If you were to buy a single-family unit with this loan, you’d be out of rental income for a year before the terms of your loan allowed you to find a tenant. But using this loan to buy a duplex for sale, you can collect rental income from a tenant while still living in half the unit. This also means buying a duplex under these terms comes with a built-in residence for you.
This type of property is often more affordable than other multi-unit properties. Of course, it’s a much smaller property to work with. But duplexes also tend to be in areas with lower costs of living, so the property itself can be at a lower price point. The land itself is also much smaller and the maintenance requirements lower. For these reasons, a duplex for sale presents a more attainable avenue for real estate investing, especially for new investors without a lot of experience under their belts.
You may also be eligible for certain tax benefits associated with maintaining a rental property. Repair and maintenance costs are a deduction from the property tax you pay. Be sure to check the tax code in your area.
Where to Find a Duplex for Sale
Here’s how to find a duplex for sale.
Hire a Real Estate Agent
Real estate agents are often experts in their field, with intimate knowledge of the surrounding area and property types. Their assistance can be valuable as you look for a duplex for sale. However, this expertise doesn’t come for free. They will take commissions out of your home sale. Common rates are anywhere from 3 to 7 percent of the final sale, which can be steep depending on the price of the property.
Real Estate Listings
If you want to take a do-it-yourself option, searching real estate listings yourself could be the way to go. The MLS will have property information on every duplex for sale at the time. But in this case you are truly on your own, and you may miss key details that can sway your decision to buy a property. If you’re an inexperienced real estate investor, you may benefit from some outside knowledge on how to find a duplex for sale.
Network With Other Real Estate Investors
If you can find other real estate investors in your area, they may be able to lead you toward promising properties. Find a local chapter of National REIA if one is available to you. If they aren’t local to you and you can’t find other organizations in your area, there is a free newsletter available.
Drive Around Your Neighborhood
Also called “driving for dollars,” this underrated real estate investment tactic has been around since well before the MLS and other services existed. It’s straightforward: get in your car and drive around your area looking for “for sale by owner” signs.
This strategy gives you a chance to find affordable properties that may not be on the MLS and for below market value. It means more potential savings for you and an opportunity to find a duplex for sale before your competition. Your only investment is time and gas.
Online Prospecting Platforms
Some online services go beyond the MLS to include key information and data analytics. Especially if you are a first-time investor, this can be valuable investment information. Continue your do-it-yourself investment search at a lower cost than hiring a real estate agent. These services do often charge a subscription fee, but many offer a limited-time free trial.
ProspectNow provides all this information with unique data analysis and lets you contact potential sellers with ease. All from the comfort of your living room. Read on to learn more about what this platform offers.
When You Find a Duplex
Like in any real estate transaction, don’t jump on the first duplex for sale that you see. You will want to make a thorough inspection of the property before committing to the sale. Not only will you potentially live here, but you need to make sure the property is suitable for tenant living. Make a note of any maintenance you’ll need or want to make before you’re comfortable putting the unit on the rental market.
Also, take a look at the surrounding neighborhood and comparable properties. Make a note of the average rental rate for similar units in the area, and aim for a rate within that range. Too high and you won’t bring in tenants. Too low and you may get hurt financially or turn off promising tenants who think your duplex for sale is too good to be true. Use your projected gross rent and expenses to calculate your net operating income, and see if that’s a figure you can live with.
ProspectNow has been in the business since 2008 and combines a powerful real estate database with unique data analysis and a full-featured customer relationship management (CRM) platform.
This platform includes data on properties in all counties, whether they’re already on the MLS or flagged as one of ProspectNow’s “likely sellers.”
When you’ve found a duplex for sale that you like, it’s time to reach the seller. ProspectNow can help with this too. Send emails and postcards directly through the platform — there are even templates available to give your communications a more professional look. You can also set up a direct advertising campaign to reach potential sellers and plant the idea of selling their property as they browse the internet or social media. Or you can reach them the old-fashioned way, with a phone call.
Are you ready to find a duplex for sale? ProspectNow has all the tools you need to find your next property and close the deal. Start your free trial today and check out all the properties available in your county.