When starting out as a novice in real estate, many individuals tend to limit their selves to a single family home due to the levels of annual appreciation. It’s great to have that ambition and even greater when getting started.
The State of Florida, specifically cities like Orlando, is looking at a prosperous time ahead for the economy and rental market, which means that purchasing an Orlando investment property (in this case, a duplex) will come with some exciting pros and a few cons to know.
What’s a duplex, and why is it attractive?
A popular spin to call a duplex is like a BOGO coupon: it’s two houses for the price of one! Another term for a duplex is commonly called a multi-family property, something not as commonly heard of for people entering real estate.
The two houses for one price means you get the luxury of living in one unit while collecting rent from the other (labeled an “owner-occupied duplex”), or have two rent incomes from two families living in each unit.
Either way, your tenants can cover your mortgage AND generate profit as passive income for you every month (well, passive if you work with an Orlando property manager).
Pros of purchasing a duplex investment property in Orlando, Florida
As with any investment choice, data and analytics play a key component. The good news is that the data is quite favorable for investors interested in a duplex, especially in the Central Florida market.
- People from high-tax and high cost of living states are rushing to Orlando for more affordable housing, work opportunities, and increased quality of life overall. For the entire 2022 year, multiple data sources suggests between 53-57% of people will rent Orlando housing units.
- Tenants paying confidently and on time are very important. Quarterly unemployment rates have dropped from 3.4% in January to 2% in March, 0.4% less than the U.S. national average.
- Note: If you find yourself still worried about tenant’s paying on time or flat out going delinquent, there’s only one way to guarantee tenant’s rent payments in all of Florida.
- Orlando’s economy is flourishing – corporations from tech and manufacturing reside here. Not to mention theme parks and prestigious universities. Orlando’s tenants are well-educated employees and employers.
A Duplex Has Many Benefits in Orlando, Florida
Two rental units at the price of one
Even though a duplex unit is generally smaller than a single-family house, it can be more affordable to buy a duplex than two single dwellings.
If you don’t live in one of the units yourself, you have a significant cash flow consisting of 2 rent payments per month.
More attractive to certain types of tenants
Many tenants prefer smaller spaces, whether because it’s a small family, a couple, an individual, or just because they’re more affordable. A duplex unit can give a cozy, home-like feeling to these types of tenants without handling the struggles of taking care of a big home.
Easier, more cost-effective maintenance
Since the units are very close to each other and they’re smaller, maintenance won’t be a pain.
On top of that, if you work with a property management company in Orlando to handle everything while you sit back and do your thing, you’ll be in for a treat. Passive cash flow without stressing about property management? Yes, please!
Cons of purchasing a duplex investment property in Orlando, Florida
Most importantly, the locations are fewer than single-family homes with a duplex, making it very resource-consuming.
Additionally, you can expect these three pain points to be especially challenging for a duplex:
- In-depth research about areas and pricing
- Understanding the optimum pricing to attract the right tenants as fast as possible
- Managing both properties (remember, it’s TWO houses for one!)
- Location diversification tends to be lacking as the units tend to be in the same area
On the bright side, property management services are more cost-effective and efficient since traveling between tenants as greatly reduced. Maintenance requestors rejoice!
More Tenants to Manage
Sorry to play the role of captain obvious, but the more properties you own—such as a duplex—the more tenants you’ll need to manage. So you need to assess the property as effectively as possible, especially doing your due diligence to ensure the property won’t cost more than what’s affordable.
The last thing you need is having tenants constantly calling you with an issue—not to mention any legal issues that could arise!
There’s a higher chance of duplexes being left by a tenant over single-family homes.
Tenants in smaller units are typically more flexible in that it is likely a short-term move versus a tenant who stays long. Scenarios such as couples who want to start a family, traveling individuals, etc. are a few reasons tenants leave.
Of course, there are two upsides that exist to this. First, the other unit will still be renting so you’re not without cash flow. Second, you are very good at finding excellent tenants fast, or by going through—you guessed it—a property management company.
Orlando Property Management Summary
Real estate investments are the most attractive ones on the market, with the potential of fantastic ROI for the investor. However, if it were easy, everyone would do it. If you know and understand the pros and cons of purchasing a duplex, you’ll be much more likely to succeed.
Just keep in mind that the cost of having a property management company help you purchase your next duplex comes with a lot of perks that usually outweigh their costs, especially if you find a great one. They can remove a lot of the stress, the headaches, and the overwhelming responsibilities of owning a duplex. Working with the property management experts at The Realty Medics will take the pressure off you.
Always remember, much like buying a rental property, it’s free to look. So, Contact Us and see how we can help. We’ve been the highest-rated and most reviewed Orlando property management for years and would be happy to assist you with buying or renting a duplex or rental investment property.