What are multi-unit (2-4 unit) investment properties?
Multi-unit investment properties are residential assets with two to four units in a single property. For example, duplexes are two-unit properties, triplexes are three-unit properties and fourplexes are four-unit properties.
What are duplexes, triplexes and fourplexes?
Duplexes are multi-unit rentals with two to four units under one rooftop. Each unit has a private entrance. The living spaces are typically split equally with a similar square footage. Tenants tend to favor 2–4-unit rental properties over apartment buildings as they offer more privacy since these properties only house up to four tenants.
What is the difference between a duplex, a triplex and a fourplex?
These three property types fall under a multi-unit (2-4 unit) property type. The three different property types don’t differ significantly. The biggest difference is the increase in income sources per property. As income sources increase, diversification, profitability and return on investment increases, all while risk decreases. Investors are attracted to this real estate property type as it offers more than one passive income source under one roof.
What is house-hacking?
New investors favor these three property types as they can house-hack the property. House-hacking means the owner lives in one of the units and rents out the remaining units. The owner is essentially living on the property for free as long as the other units generate enough rental income to cover the monthly mortgage alone. House-hacking also allows first time buyers to secure a lower interest rate and lower down payment as they will be living on the property. This is an easy and affordable way for new investors to get started in real estate.
Where can investors find these investment opportunities?
Investors can find duplex, triplex and fourplex investment opportunities through numerous sources such as:
- Zillow
- Redfin
- MLS
- Opendoor
- Wholesalers
