FAQs
Why buy a duplex?
Many times the duplex prices are less than the single family homes in the neighborhood.
You get double the square footage.
You get assistance from a tenant to offset your mortgage.
With a substantial down payment, you can cover your costs.
Live in one unit for 2 years or more. When you sell, take a $250,000/$500,000 tax free deduction and a tax deferred 1031 exchange on the other half
Tax benefits (call your accountant for details)
These duplexes are constructed with remarkable workmanship and quality materials
Do duplexes make great investments?
It depends what you are trying to achieve. If you think the tenants’ rental payments are going to cover your expenses, you are wrong. Don’t forget you have a mortgage, taxes, expenses and insurance payments. Whether you are owner/occupier or investor - most likely you will not make a profit every month. However, you do get to take depreciation on the property on your tax return and you can expect to get appreciation over the years. Improve and protect your investment.
What kind of down payment will a lender require?
This depends on your income, your debt ratios, your credit score and if you will be occupying the property. Rule of thumb - expect to put down 25% of the purchase price or 30% or more if you are not an owner/occupier.
If both units are tenant occupied, can I evict one?
You can do a legal eviction, if you intend on living in one of the units. But, be prepared. Contact the Los Angeles Rent Stabilization Board/Los Angeles Housing Authorities for details.
What are the relocation fees?
Contact the Los Angeles Rent Stabilization Board/Los Angeles Housing Authorities for details - the amounts are constantly changing and there are different amounts for qualified tenants.
Do I need a management company?
Typically not for two units, especially if you are going to live in one of the units.