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Navy Federal Credit Union
Headquarters:Virginia
LOS:Empower
Loan Officers:341

Multi-Unit Rentals (Duplex, Triplex, Fourplex)

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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 is a duplex?

Duplexes are multi-unit rentals with two units under one rooftop. Each unit has a private entrance. The living spaces are typically split equally with an identical square foot measurement. A unique benefit that comes with owning a duplex is the ability to sell one of the two units. Duplexes can have different owners per unit with shared lot ownership. Duplex features: two doors, two kitchens, two living spaces, garage, and outdoor space similar to a home. Tenants tend to favor duplexes over apartments as it offers more privacy as the space is only shared with one other unit.

Duplexes are an attractive investment for investors as it allows for diversification and alleviates risk as the income produced by the property will come from two income sources. New investors favor duplexes as they can live in one of the units and will essentially be living for free as long as the second units rent is high enough to cover the mortgage alone.

What is a triplex?

Triplexes are multi-unit rentals with three units under one rooftop. Each unit is usually on separate floors. Each unit has a private entrance. The living spaces are typically split equally with a similar square foot measurement. A unique benefit that comes with owning a triplex is the ability to sell one of the three units. Triplexes can have different owners per unit with a shared lot ownership. Triplex features: three doors, three kitchens, three living spaces, garage, and outdoor space similar to a home. Landlords usually offer certain amenities as benefits: laundry, driveway access, garage access. Triplex tenants also benefit from more privacy compared to an apartment complex.

Triplexes are an attractive investment for investors as it allows for diversification and risk becomes reduced. The income produced by the property will come from three income sources. Investors favor triplexes as they can live in one of the three units and will essentially be living for free as long as the two other units combined rent is high enough to cover the mortgage alone.

What is a fourplex?

Fourplex are multi-unit rentals with four units under one rooftop. Each unit is usually on separate floors. Each unit has a private entrance. The living spaces are usually the same square foot measurement. A unique benefit that comes with owning a fourplex is the ability to sell one of the four units. Fourplexes can have different owners per unit with a shared lot ownership.

Fourplexes are an attractive investment for investors as it allows for diversification and risk becomes reduced. The income produced by the property will come from four income sources. Investors favor fourplexes as they can live in one of the four units and will essentially be living for free as long as the three other units combined rent is high enough to cover the mortgage alone.

Duplex, Triplex and 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, while risk decreases. Investors are attracted to this real estate property type as they offer more than one passive income sources under one rooftop.

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