Duplex layouts are ideal for families. These can be two bedroom or three bedroom with a shared wall and backyard separated by a partition. However, compared to other types of residential accommodation, there are a number of things that you should check out before renting a duplex.
Here is a list to get you started.
Location matters: Taking up an apartment in the city versus looking for a duplex to rent out and if possible also sublet or the extra income are two different things, especially when it comes to location. Consider the commute from your newly acquired duplex to work or school. Also, duplexes are generally part of a community system where there are a number of rules and regulations to be followed and be a part of the said community. This might not give you the leeway to maybe sublet your apartment unless you get an approval from the other members.
Some communities may be not part of your budget, for example beach house duplex living spaces are prime property and this will of course affect the price exclusively. The ones which do fall in your budget may not be very appealing or may not be suited for your purpose. You have to try and find something which gives you the best of both worlds, in terms of a good deal and good living space.
Renting out the extra unit: You have taken a duplex unit, and most probably will be occupying only one of the units and plan to let out the other. Again, a number of factors have to be taken into account before this can be done. For one thing, you have to check with the community and ensure that letting out the extra unit will not be an issue. Of course, the added income will be a huge advantage, which helps manage cash flow.
From a homeowner’s perspective, the plus points are the extra income from the rental unit can help with a lot of other things. Duplex are affordable, compared to other residential units. There are a number of factors which affect the price, like the community the duplex is part of, area and prime location. But the biggest advantage of renting out a duplex is that the extra unit can be given to a family member who might need constant medical attention and care to recover, which is easy to manage when you are living next door.
A reverse mortgage is a type of loan that allows homeowners to receive payments on their house as opposed to them making payments to the lender. At first glance, this option seems too good to be true. But, before committing to it, there are some nitty-gritty details that people must consider when opting for this type of financing. So, here is some information regarding the pros and cons to consider when getting a reverse mortgage.
Advantages
Disadvantages
A reverse mortgage is a loan that allows individuals older than 62 to improve their financial well-being. They can convert part of their home equity into lump sum cash, fixed monthly payments, or line of credit, according to their preference. The money can be used to pay for medical bills, in emergencies, or to pay off a mortgage. Here’s what you should know about reverse mortgages in case you’re looking for one.
How much can you borrow?
For reverse mortgages, the loan amount can’t exceed the value of the property against which it is borrowed. Federal regulations require lenders to ensure that the loan amount doesn’t exceed the value of the house by structuring the transactions accordingly. Additionally, these regulations state that the owner/borrower is not liable to pay off the balance amount in case it exceeds the property value.
How are reverse mortgages paid for?
A reverse mortgage is payable when the borrower sells the house, relocates permanently, or dies. Unlike forward mortgages, reverse mortgages don’t need the borrower to make any monthly payments. They are only liable to pay interest on the money received, which is rolled back into the loan balance. While the owner gets to keep the title to the home, their home equity reduces over the loan tenure.
Who can take a reverse mortgage?
This type of loan is ideal for seniors and retirees whose net worth comes mostly from the value of their home. Seniors who don’t qualify for a home equity loan or can’t refinance due to limited cash flow or poor credit can opt for reverse mortgages. Home Equity Conversion Mortgage (HECM) for purchase is a reverse mortgage that allows seniors to buy another property. That said, it is complex, and you should study the risk factors before getting one.
What are the risks associated with reverse mortgages?
Reverse mortgage scams are not unheard of. Unreputable vendors could offer to help seniors secure reverse mortgages by undertaking house repairs. They don’t provide quality results and get away with the homeowner’s money instead. For spouses living together in a home with only one spouse named as a borrower on a reverse mortgage, the other spouse can lose the home if the borrowing spouse dies first. Besides, reverse mortgage lenders charge fees and closing costs and may also charge mortgage insurance premiums for federally-insured HECMs.