Want to buy a house in El Segundo? Don’t limit your search to single-family homes, especially if you want a big return on your investment. Real estate is a great way to generate income, but profits come in many forms. Whether you sell a house for more than you paid or collect rent checks from tenants, every property is a potential source of revenue. However, duplexes and other multi-family units actually offer the best of both worlds, doubling as homes and rental properties without the need for additional investments.
If you’re ready to become a landlord, consider buying an El Segundo duplex and renting out the other unit. But first, you need to know more about the advantages that attract homeowners to duplexes – and the risks and limitations that keep other investors away.
Here are some of my favorite pros and cons of buying a duplex in El Segundo:
1Pro: Tenants Help with Mortgage Payments
The most obvious advantage of owning a duplex? The rent checks every month. Whether you want to save up extra money or qualify for a more valuable property, the money you collect from tenants will off-set some of your mortgage costs and make it easier to afford your new home.
2Con: Tenants Might Be Unreliable
Even if you screen your tenants thoroughly (or pick people you already know), it’s impossible to predict every outcome. Trusting other people with your property is already a financial risk, because they may cause damages you have to fix or stop paying the money on which you depend. However, it’s an extra risk for duplex owners who have to share a wall and yard with flaky or destructive tenants.
3Pro: El Segundo Duplexes Tend to Be Cheaper
Even if you can’t afford a single family home in a certain price range, you may be able to afford a duplex in the same price range because of your extra income as a landlord. In fact, rent checks may make it easier and cheaper to get a mortgage in the first place. Lenders factor future rental income into their decisions, so your interest rate may be lower and you may qualify for pre-approval more easily if you plan to make a profit every month.
4Con: Finding a Duplex in El Segundo May Be More Difficult
If multi-family homes have so much investment potential, why don’t more homeowners choose this path? Maybe there just aren’t enough to go around. Single-family properties are plentiful here, but there are fewer duplexes in the El Segundo real estate market. And because so many neighborhoods revolve around standalone homes, the duplexes that are available are concentrated in a fewer number of neighborhoods. If you hope to buy a duplex, be prepared to limit your search to certain parts of town.
5Pro: Keeping Track of Your Rental Unit is Easier
As an investor, you want to have control over the condition of your investment. As a landlord, that means you want to know that your tenants are treating it well. If you live in the same building, this is much easier to do. You can identify and handle most of your rental unit’s maintenance needs right away, rather than depending on tenants to update you.
6Con: Privacy and “Clocking Out” Are Harder
Of course, constant availability and close proximity come with drawbacks too. If your tenants are destructive, loud, or unreliable, you still have to live next door to them. And if they have requests or complaints, they can knock on your door at any hour of the year. Let your tenants know you’ll be “off the clock” after normal business hours unless they have an emergency.
Are you ready to become a landlord? An El Segundo duplex could be the right investment for you and your family. Contact me at (310) 877-2374 to start looking for a duplex in El Segundo today.