Owning a home in which you live with others is an excellent way to save money, build equity, and enjoy the companionship of other people. But there are some downsides to living in a multi-unit building.

Buying a home is a huge investment, especially when you’re buying a two-family house, there are additional considerations that need to be taken into account. You can live in it or upgrade it to sell it or rent it out at a higher value for investment purposes. This makes it an important financial decision.

When buying a two-family house, take into account these nine factors.


1. Location

Firstly, there are limitations in terms of neighborhood choices for multi-family housing. Most neighborhoods do not entertain the idea of multi-family units, so you need to acknowledge the shortage in these particular property types before buying.

Townhouses and apartments often have benefits and drawbacks inherently associated with them. In urban areas, multi-family housing units are more common, while suburban areas have single-family homes or townhouses.

You should research the locations you are considering for purchase to ensure that their initial costs may be lower. If you’re interested to land a property in Nashville, one good place to buy two-family homes is in Clarksville TN,  a beautiful city located in the north of Tennessee.


2. Property Cost

Two-family homes are typically more expensive than single-family homes. They also offer more space, especially if they are located near public transportation or schools. In addition, they often have higher maintenance costs.

If you want to live close to your job, then a two-family home might be perfect for you. Or perhaps you prefer living in a neighborhood where you don’t have to worry about isolation. Whatever your preference, a two-family home offers flexibility.

It is also important to ensure that the property is spacious enough to accommodate both families. It’s not uncommon for people to buy a house with only one bathroom when there are multiple adults and children living there.

Buying a two-family home is a smart move. However, if it’s solely for investment purposes, you may want to get the property value checked in the apartment index market index. It can help you determine the value of investing in multi-family property in some of the major cities.


3. Financing

If you decide to purchase a two-family home, you will need to consider financing options. An equity line of credit (ELOC) or a mortgage loan are both options to consider. A mortgage loan requires monthly payments while an ELOC allows you to borrow against the value of your home.

You’ll need to determine your current financial situation. This means taking a look at your assets, liabilities, and net worth. In order to calculate your DTI ratio, you will need these numbers. If it’s under 36%, then you’re probably qualified for a conventional mortgage. But if it’s over 36%, you might need to consider other options.


4. Size

Buying a two-family house is a big decision. Buying a home involves many factors. The size of the property, location, number of bedrooms, bathrooms, garage space, etc., are some of them.

A two-family house is usually a duplex or triplex. These types of homes come in various sizes, from two-family houses to four-bedroom townhouses. As well as their size and features, the price of these products varies. The amount of space needed by each member of the family should also be considered.


5. Taxes

If you plan to live in the home as a primary residence, you will likely pay property taxes based on the value of the home. A homeowner’s insurance policy is also likely to be necessary. These costs can add up quickly, so make sure you budget accordingly.

Before you purchase a home, you should calculate your tax liability. This means figuring out how much you owe in property taxes and other fees.

Before buying a two-family house, you should check whether or not you qualify for tax benefits. The IRS offers several tax breaks for homeowners who invest in a two-family house.

Landlords who rent their properties to tenants usually report rental income on their individual tax returns. The amount of rental income they receive depends on whether they are considered real estate professionals or not.

By using the information provided, you can determine your net income from rented properties. Rental property expenses must then be deducted.

These include mortgage interest, property insurance, maintenance costs, utilities, repairs, and cleaning. Your property improvements will need to be added back in.


6. Privacy

Having a two-family house can decrease your privacy. Tenants will often pass by with questions and problems. You may hear them through the wall and they may too.

It’s likely that you want those pesky tenants to leave sometimes. The problem is, you might not always be able to evict them. In some states, landlords cannot legally kick out tenants without good cause.


7. Vacancy Expense

A rental property is just like any other business. In any business, you should analyze your expenses to see if they are costs that can be lowered or eliminated.

Many owners do not understand the importance of analyzing the components of their costs since they are always valued more to maintain than opportunities and improvement.

As a tenant rents out your home, you may end up paying greater amounts in vacancy expenses compared to revenue from tenant rent. You can calculate the total amount of vacancy expenses by multiplying the number of days your property was vacant by the average daily rate.

The average amount of rent you would normally expect to receive each day. For example, if your property was vacant for 30 days and the rent is $1,500, then you would multiply 30 by $1,500 to determine the total amount of vacancy expense.


8. Rent Collection

Collecting rent money from tenants is a nightmare and is one of the most dreadful concerns property owners have. It’s likely that you would not want to go through that experience again if you’ve ever had trouble collecting rent.

Although, if you intend to rent out the place, you must be prepared to sign a contract with your tenant that includes an agreement with rent payment dates and methods. This will save you from the trouble of having to chase them at the end of every month.

Landlords face a number of challenges when collecting rent. They must deal with late payments, evictions, and other issues that can cause them to miss out on revenue.


9. Selling the Property

Selling a multifamily home tends to be more complicated than selling a single-family home because there are fewer buyers and sellers. In addition, if you have tenants living in one of the units of the property, you must consider their legal rights before putting the home up for sale.

A potential buyer will want to know details of their lease agreement, what’s covered in the rent, whether there’s a security deposit involved and more.



A two-family house is becoming increasingly popular because of its affordability and flexibility. Although, you should always invest strategically in real estate during inflation.

In this article, I shared some important considerations to take into account when buying a two-family house. This will accelerate your real estate investment for rental property.



  • Contributor

    We believe in the positive, life-changing impact of real estate investing. Our mission is to help investors achieve their goals to build wealth, better manage time, and live a life full of purpose.

Related Posts


Submit a Comment