Rental duplexes offer a number of unique advantages for residential real estate investors.

1. Duplexes may offer better returns. Rental duplexes typically offer better investment returns—and cash flow—than comparable single family homes. Duplexes typically have a lower purchase cost per square foot than comparable single family homes. Utilities, property taxes and homeowner insurance payments are usually less as a percentage of gross rent as well.
2. Duplexes are more affordable. Duplexes are less expensive to buy than other types of residential properties including fourplexes, apartment buildings (with more than four units) and even single family homes. This makes investing in duplexes a great fit for those with modest investment budgets or for novice real estate investors who want to “test the water” with investment property ownership.
   

   A duplex is a residential structure with two separately contained living units, each with its own separate entrance. The units may be situated side by side or one may be above the other on a second story.

3. Duplexes have lower cash flow risk. A rental duplex investor renting out both units will not have a period of time with zero cash flow (no rent coming in) unless both units become vacant at the same time. With a single family home, no tenant means no cash flow. In fact, owners of high cash flowing duplexes are able to pay their monthly loan payment, property insurance, property taxes and utility bills using the rent from only one unit! Many duplex investors cite reduced cash flow risk with duplexes as one of their primary reasons for wishing to own them.
4. A duplex unit pays your homeowner costs. A duplex owner who chooses to live in one unit and rent the other would be able to apply the second unit’s rent to cover most or all of his or her mortgage, property tax and homeowner insurance payments for both units. If the property was purchased with cash, the rent not only pays for the property tax and homeowner insurance, but also provides an income stream for the owner.
5. Duplexes tend to be easier to sell. Due to the advantages already mentioned, duplexes tend to be one of the easiest types of investment real estate to sell. In many markets there is an established real estate investor network specifically interested in purchasing duplexes.
6. Duplexes can have lower selling costs. Should you wish to sell your rental duplex, you can often find a buyer directly. Many duplex owners own multiple such properties and are looking for more. By contacting them directly, you avoid paying up to six percent of the sale price in sales or broker commissions. Lower transaction costs can be a major advantage of investing in a duplex.