Duplex vs Single family House Hack
Rental Property Investor · Ocean City, NJ · Member since 2019 · 15 posts · 14 votes
Hello everyone,
I’m looking into house hacking and wanted to hear some opinions on house hacking a duplex vs a single family home.
It seems like a duplex is the better option as far as numbers wise with halving multiple units able to be rented once I move out of the property. But with duplexes being so hard to find in my market should I settle for a single family house hack?
@Sam Trulli, obviously go where you find the numbers work. However, I am a big duplex fan. Long term I think a duplex will beat out a SFH. Starting out, either can work but if you go the SFH route, at sometime in the future one of two things will occur. You will tire of having strangers live in your house or you will eventually move. Moving will cause issues as to who or how will you manage multiple tenants in one unit or you will just rent to one tenant giving you less rent total than renting out two sides of a duplex.
A duplex on the other end is easy to manage in both situations. You can get a roommate on your side if you want but when the time comes that your tired of having a roommate you can easily not renew and not take a big hit with lack of income since it is only one room or so that you are eliminating. You always have income coming in between tenants with a duplex. That is a big deal as cash flow is king. Also if you end up renting the SFH vs a duplex it is easier to get two $1000 renters vs one $2000 renter. So ease of management is a big plus with a duplex. However, if you can't find one in your locale then you can fall back to the SFH house hack.
I'm impressed lot of us do the same strategy lol, I almost purchased another 5/2 two months ago in hayward but got outbid again LOL
I'm impressed lot of us do the same strategy lol, I almost purchased another 5/2 two months ago in hayward but got outbid again LOL
I'm impressed lot of us do the same strategy lol, I almost purchased another 5/2 two months ago in hayward but got outbid again LOL
hahaha yes ! that's my territory :-) LOL LOL
Whether you should house hack a duplex or a single-family home depends on various factors, including your financial goals, lifestyle preferences, and market conditions. Here are some considerations to help you make an informed decision:
You need to live in one of the units. That's basically getting a rooommate. The problem is if you do it on single family (also known as boarder income) you can't count the boarder income toward qualifying until after they have lived with you for a year.
If you go multi you can count the income, up to 4 units.
Good question! I think it ultimately depends on your goals as others have mentioned. Do you mind sharing your space with multiple people? If yes, then both options can be on the table and will give you more options to choose from in the market. If no, then maybe a duplex or something with a separate dwelling unit is the move.
My wife and I have a duplex in Charlotte. For us, we would not want to live with our tenants, so the duplex or ADU were the options. Personally, I love the duplex idea, because when you move out, then it's easy to manage renting out both units. You won't have to rent by room or decide how to split a house for rent in future. However, that isn't impossible to do if you go that route.
If duplexes in your area are uncommon (Charlotte was too) you might have to be patient. Set up a drip campaign with an investor friendly agent for your buy criteria. Analyze every single deal and be ready to make an offer if the deal makes sense.
Good luck Sam. Please reach out if you have any questions. I'm happy to help!
-Ant
Whether you should house hack a duplex or a single-family home depends on various factors, including your financial goals, lifestyle preferences, and market conditions. Here are some considerations to help you make an informed decision:
@Diya Shenme, a very good summary of the two. However several of the points made were related to life style preferences. Take those out of the equation and view this strictly from an investors point of view and it is NO CONTEST. A duplex blows away a SFH as a pure investment and house hack opportunity.
This is an INVESTOR's website. Duplex produces more income, easier to rent, easier to repair and in expensive markets has the potential to appreciate more. Some of you might disagree, so let me enlighten you.
2000 sq ft duplex vs a 2000 sq ft house. Duplex is 1000 sq ft 2 bedrooms 1 bath each side no garage. House is 3 bedrooms 2 baths with garage.
Making average assumptions, will vary from location to location but premise remains the same.
Income: Each side of duplex rent $1500 total rent $3000 per month. House rents for $2100 per month. Even if duplex cost 50k more, the extra $900 a month income offsets additional cost of duplex. Because households are smaller today vs 20 yrs ago due to delay in marriage and child bearing smaller units are in more demand because of need and affordability.
Easier to rent: Two bedrooms attracts fewer occupants (not tenants) vs a 3 bedroom where often that extra bedroom is housing an adult kid, dead beat family or friend. It is easier to find two $1500 tenants vs one $2000 tenant. More tenants only need a 2 bedroom than a 3 bedroom and are not willing to pay an extra $500-600 for the 3rd bedroom. When the economy turns sour, lower rents will have less pressure to downside, therefore increase layoffs will affect higher rents than lower rents. Vacancy will be less affected with lower cost rents. How many McDonald's go out of business due to a down turn. Two young people working at McDonalds can easily afford $1500 in rent not so much at $2100.
Easier to repair: Now this one is debatable only because there are two units vs one, but hear me out. Each duplex unit is 1000 sq ft. Which translates to fewer walls to mess up, fewer rooms to mess up and less repair time per unit than a 2000 sq ft house. You will have a tenant from time to time to mess up your unit/house. You will have more maintenance cost and down time when that happens. A duplex will produce income even when one side is empty, not the case for a house. It is easier to bullet proof a small duplex than a house. When comparing a duplex to a house tenants usually expect a house to be in better condition so your competition is more challenging. It is easy to spend a few extra dollars fixing a duplex up and be the best on the block. Not so much with SFH. When competing on quality; owner occupants vs rental neighbors, owner occupants usually have better properties. Duplexes have more appliances (2 kitchens and two heating/AC units) so that is a disatvantage but a used appliance can be fixed in an hour, a hole in the wall take a lot more time. More likely to fix holes and paint than replace a used appliance. SFH have more wall space.
Appreciation: It is a myth that SFH appreciate faster than a duplex. It is more dependent on location and market. Hear me out. In less housing demand areas a SFH has the potential to appreciate more. However in hot-expensive markets NOT SO MUCH! Why? Because of affordability. I have lived in Austin TX for the last 25 years. 20 years ago Austin was not the hot destination as it is today. 20 years ago duplexes sat on the market, no one was buying them, there were plenty of affordable SFH on the market. NOT TODAY! Homes are not affordable in AUSTIN today! Heck duplexes are problematic too. However a young couple has a better opportunity buying a more expensive duplex vs SFH in Austin because of the income produced from the other unit. More and more owner occupants are considering a duplex purchase than 20 years ago because of affordability. Lastly, owner occupants and investors are realizing that buying a duplex gives them so many more options than a SFH. Let me explain. We live in a fast pace MOBILE society today that ever before. You buy a duplex and then find yourself having to move, you simply get up and go. Rent you side out and probably cash flow even to positive if you have owned 3-5 years. Do that with a SFH and you are probably cash flow negative when you leave and your peace of mind goes away when you have a vacancy!!!!! So many people don't consider buying if they are not sure they will be staying in the area long term. Less of an issue with a duplex.
Lastly one might argue that your tenants will stay longer in a SFH vs a duplex. There is some truth to that under certain conditions. For example, I bought two duplexes in the same cut-de-sac. One had porches at opposite ends and one car garages in the middle separating the units. The other a shared porch and no separation from the garages. Bought both duplexes in 2005. One duplex as had a total of 4 tenants for 19 years and the other probably 8 tenants or more. Still not bad in terms of turnover, mainly due to the quality of my units and the affordability of a duplex over a SFH in the Austin area. My duplexes that have opposite porches act more like a SFH than those with shared porches.
My best advice to INVESTORS: Buy single story DUPLEX, 2 bedroom 2 baths (1 bath is fine), porches separated with one car garage/carport and YOU WILL BE A HAPPY CAMPER! Peace.