Purchasing a duplex or two-family home, while a big undertaking, can be great for investment purposes. As a homeowner, it may even help improve your finances should you rent out the second unit. When purchasing a 2-family home, it’s important to bear additional factors in mind such as location, timely payments, privacy, building maintenance etc.
Multifamily housing units are usually found in greater numbers in urban neighbourhoods, whereas single-family homes or townhouses tend to spring up in suburban areas due to certain zoning regulations.
Consider the location of your duplex or 2-family home keeping your potential tenants in mind. The quantity of renters is dramatically affected by the location and access to family-friendly amenities, distance to schools, hospitals, and other necessary establishments.
Overestimate your expenses
Unexpected expenses often crop up in the form of additional repairs when investing in a multifamily property. While financing for the down payment, it’s best to overestimate your expenses and be prepared to have a larger cash reserve than you need.
This helps ensure you’re not left with a costly surprise later and have an extra cushion added into your repair budget when calculating your total return on investment.
To increase your occupancy rate and make the property more desirable to future renters, renovation is a no-brainer. Consider a small but effective upgrade of the units to make your multifamily home more attractive to potential tenants. With a set budget for renovation, you can ensure your renovation expense does not exceed your earnings and allows you to maximize your ROI.
Floor plan is key
The layout of your duplex home is important to tenants with children or elderly residents who may want to avoid homes with a main-floor master. For instance, if renters with children wish to be on the same level as their kids, or be able to spot their toddler at all times, they may avoid homes with steep stairs or living areas that are visually blocked away from the kitchen.
Indoor play areas are favoured for cold-weather or rainy cities like Vancouver, and tenants with toddlers tend to consider whether there’s ample space for toys. If an indoor play area isn’t sufficient, then reasonable yard space or proximity to a playground may come in handy.
In any shared dwelling, privacy is hard to come by and as a landlord when you rent out to more than one tenant or a family, your privacy may be subject to even more infringement. Living in a duplex means you’ll be in close proximity to your neighbor, however there are measures you can take to increase soundproofing, or establishing a healthy understanding of boundaries with your tenants. Separate units can ensure greater privacy.
Be ready to face the possibility that rent payment may or may not always be on time, so ensure their rent payment doesn’t affect your cash flow or your ability to pay the mortgage.
Gain insight from experienced realtors
Purchasing a multi- family home in Metro Vancouver doesn’t have to be overwhelming. While there are a lot of pieces to the puzzle, an experienced agent who specializes in multi- family home purchases can assist you through the entire due diligence process. You should also work with a reputable home inspector to get detailed information about all of the major systems, structures, and components of the house.
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