Photo: Magda Ehlers

What is it called when you have two houses on one property?

Duplex/Triplex The term duplex refers to two units or homes that are connected either via a common wall, ceiling or floor. A triplex has three. Each home in a duplex or triplex has its own entrance. The units may also have separate yards and garages.

bankrate.com - What Is A Multi-Family Home? - Bankrate.com

How do you pick a shed color?

If you want it to blend in with your landscaping and yard, it's best to choose neutral colors like shades of white, brown, and gray. If you like...

Last updated Jul 24, 2022

Do pole barn add value to property?

Many homeowners find that their pole barn can add $10,000 or more to their home property value. Often, the value can be 50-80% of the cost of the...

Last updated Apr 5, 2022

Are shed plans easy to follow?

These are! They guide you every step of the way to complete your dream shed.

Learn More »

Promotion

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money . Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate follows a strict editorial policy , so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts , who ensure everything we publish is objective, accurate and trustworthy. Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Bankrate follows a strict editorial policy , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate follows a strict editorial policy , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Multi-family homes can be a great way for novice real estate investors to get started buying properties that will generate passive income. However, these properties, which contain multiple units for more than one household, have some challenges that single-family homes don’t have. If you’re considering buying a multi-family home, here’s what you need to know before jumping in.

What is a multi-family home?

How do I run power from my house to my shed?

With all necessary tools and materials on hand, you can now begin running electricity to a shed. Plan Out Your Electrical Layout. ... Install a...

Last updated Jul 31, 2022

Why should you over hang your shingle a half inch?

The edge of the shingles should hang over a roof between an inch and an inch and a half — or between a half inch and three-quarters of an inch if...

Last updated Feb 23, 2019

Can I build my own shed?

Yes, with the right plans you can build your dream shed.

Learn More »

Promotion

A multi-family home is a single building that’s divided to accommodate more than one family living separately. They can range from a duplex, which has two dwellings within a single building, to homes or small apartment buildings with up to four individual units. (Buildings with more than four units are typically considered commercial properties.) The owner of a multi-family home can either live in one of the units and rent out the others, or live elsewhere and rent them all out. The rules for financing a multi-family property are different depending on whether the owner will live there or not: If you don’t plan to live in your property, you’re considered an investor. You may be able to use the projected rental income from the property to help you qualify for a mortgage, and you may also qualify for a higher loan amount. “When you’re looking at a single-family home, you’re thinking about your own needs only,” says Charlotte Winckowski, a Realtor with iKey Realty in Toledo, Ohio. “When you’re looking at a multi-family home, you have to think of it more as a business: What will the needs of your tenants be? What kinds of income will it produce, and what will your expenses be?”

Multi-family vs. single-family homes

While you can rent out some or all of a single-family home, multi-family homes have other distinct characteristics. Some started out as large single-family homes that an owner or developer decided to divide into multiple units. Each unit in a multi-family home has its own address, its own kitchen and bathrooms and typically its own entrance. However, those living in multi-family homes may have less privacy than those living in single-family homes because of shared walls.

Types of multi-family homes

There are various kinds of multi-family homes to consider, with different offerings in terms of layout and living space. Each type of house has its own pros and cons, as well.

Duplex/Triplex

The term duplex refers to two units or homes that are connected either via a common wall, ceiling or floor. A triplex has three. Each home in a duplex or triplex has its own entrance. The units may also have separate yards and garages.

Condo

A condo is typically an individually owned unit within a community or building made up of other individually owned units. In most cases, condo owners are required to pay monthly fees to a homeowners association. These fees cover the costs of upkeep for any amenities that may be included, and in some cases they cover insurance for the building or community, as well.

Townhome

Similar to duplexes, townhouses or townhomes are homes that are attached to one another via a common wall. Typically they have two or three stories. They are more spacious than apartments and generally involve far less maintenance and upkeep than a single-family home.

Semi-detached house

Like townhomes, semi-detached homes include a shared wall with another home. However, semi-detached houses are typically bigger than townhomes. These types of homes can be more affordable than a freestanding single-family home. They may also offer less costly maintenance, as the owners of semi-detached homes may share upkeep expenses.

Pros and cons of multi-family homes

Pros

The rental income a multi-family property earns can help offset the cost of your mortgage and other expenses, providing you with an income stream. “For some owners, the rent is enough that they don’t have a house payment at all,” says Paul Wyman, managing broker of the Wyman Group in Kokomo, Indiana. “They’re able to use income from other units to cover their mortgage and insurance, and that frees them up to use their cash for other things.” You’ll be able to tackle repairs and maintenance more easily. If you live in or close to your rental property, you are less likely to miss major issues and will be able to respond faster when problems arise. You can write off much of your home maintenance as a business expense and prorate part of your mortgage interest payments.

Does mold go away in winter?

Many people think that mold issues disappear in the winter, but mold is actually a year-round problem. It flourishes in environments between 60 and...

Last updated Mar 17, 2019

Do you need a concrete pad for a shed?

Only when your shed is to be located in an area that is below the grade of the rest of your yard should a concrete pad be considered for extra...

Last updated Jun 24, 2018

Promotion

These properties can be an ideal option for multi-generational families who want to be close but retain their privacy. (They also help you keep such options open in the future.) If you start out living in one unit but ultimately move out, you can still keep it as an income-producing investment, earning even more once you start renting it out.

Cons

Since you’re buying more than one unit, it may cost more upfront to purchase a multi-family home than it would to buy a single-family home. Being a landlord is a time commitment, and living in the immediate vicinity of your tenants means you may get knocks on your door at any time. You’ll also need to be comfortable negotiating lease terms and screening your tenants, not to mention dealing with them in a business-like way when the rent is overdue, there are issues with noise or there’s damage to the property. If your units go vacant or a tenant is late with the rent, you’re still responsible for paying your mortgage. You also have to cover the cost of (quickly) repairing problems, like a leaky roof or clogged toilet. “Even if you don’t have a housing payment every month, there is still financial risk in multi-family homes,” Wyman says. You’ll need a substantial emergency fund. The more units you have, the less impact an individual unit will have on your overall cash flow, but landlords should have plenty of money set aside to cover unexpected repairs and rent on vacant units. It can be complicated to sell a multi-family property that has tenants in place, since you’ll need to coordinate showings and appraisals — and keep the tenants apprised of the process.

Maximizing returns on a multi-family home

In most cases, a multi-family home will also serve as an investment property for the owner. In order to maximize your investment, it’s important to understand the costs associated with the property, including not only your mortgage, property taxes and homeowners insurance, but also other expenses, such as utilities, real estate agent fees, advertising (to attract tenants) and legal fees. “An evaluation of the property should include an inspection by a licensed inspector and market research to include a market lease-rate analysis along with current market rental conditions,” Wyman says.

Who are multi-family homes best for?

Purchasing multi-family real estate is best for those who are interested in getting into real estate investing to generate wealth and are comfortable with the added responsibility and time commitment that comes with being a landlord. These types of homes can allow you to live rent free, if you occupy one of the units and the rent from the other units generates enough income to cover your monthly expenses. Once the mortgage is covered, the rent from multi-family homes can become a passive stream of income. They can also be a smart choice for multi-generational families interested in buying a property together while having their own dedicated space. Typically including anywhere from two to four units, multi-family homes allow extended families to live under the same roof while still enjoying the benefits of having the privacy of individual units.

How to find a multi-family home

A real estate agent, either with a residential or commercial specialty, may be able to help you find investment opportunities in your area, as well, and could even know of some opportunities that have not been advertised online. As with any house hunt, do your homework to see what multi-family home prices are like in your market and what you might expect to pay.

Find other housing types

bankrate.com - What Is A Multi-Family Home? - Bankrate.com

How long can plywood last?

With the advantage of being manufactured 100% from natural plantation wood, plywood has relatively high durability and a lifespan of up to 35...

Last updated Nov 19, 2022

How big does a run-in shed need to be for 2 horses?

The average run-in shed is about 12 to 14 feet deep, with about 12 running feet for every 1-2 horses. Basically that's the size of a standard stall...

Last updated Jun 19, 2020