For what reason would someone sell a duplex? The lack of consistent rental income in duplex ownership makes this one simple. If even one renter leaves, that’s a 50% drop in rent.
Evicting a savvy renter may take more than a year, during which time you won’t collect rent and won’t be able to locate a replacement tenant. This might make you ask: can I split my property and sell half?
What Is A Duplex?
In legal terms, the two separate houses in a duplex are part of a single property that has been subdivided. The owner may or may not reside in one of the flats, although they are used as rental properties in most cases. It’s common for them to have four to five bedrooms and two to three bathrooms with an additional living area and kitchen added and properly demarcated.
Each unit in a decent duplex should only be responsible for its share of the utilities. It’s preferable, but not required, if the units have their own air conditioning, furnace, water heater, and laundry.
Typically, such assets are sold as a package deal rather than in separate halves. The fact that it was a single-family home formerly divided into apartments is a contributing factor. There is only one land title and one tax ID for the whole duplex.
Can You Split A Duplex?
Can you sell half of a duplex? For a split sale to be possible, each unit must be capable of functioning as a single dwelling. What this implies is that there is private entry and amenities, as well as sufficient space like that of a regular house. Apartment building amenities like the dumpster and the laundry room are examples of items that may be pooled for the benefit of residents.
Keep in mind that it may be challenging to locate a buyer ready to share responsibility with you if there are any common features (such as a roof) despite your best efforts to keep it distinct. Consider the following scenario: one side of a duplex has a leaky roof, but the whole roof has to be replaced.
Can you sell one side of a duplex? Your duplex won’t be ready for the market unless you go through each lease agreement. The house may be sold with tenants still living there, but prospective home buyers will undoubtedly have some queries about the leases and the terms of possession. Examples of such inquiries include whether or not security deposits are being retained, the length of any remaining contracts, and the rent and utilities included for each unit.
Consult an attorney if you need help deciphering your lease or figuring out your duplex ownership rights and responsibilities under state law requirements.
But if you’re thinking of selling your Houston rental duplex, it’s best to give your renters written notice in advance. The notice should tell the renters when you plan to put the half duplex for sale and what they may do to be ready for showings. Include the means of contact you’ll use (phone call, email, or text) and the amount of advance warning you’re providing. Your renters should be more amenable to showings and moving out if you are honest with them.
Can you sell a duplex separately? Buyers in places like Houston, where the more reasonably priced property is available, may find the consideration of this question less appealing. Spending a lot of money preparing to sell half of a duplex without receiving a satisfactory return is not something many sellers are interested in participating in. Finding a buyer for this property will be difficult since obtaining financing will be challenging.
Two of the costs you may expect to spend when selling your duplex are paying for a professional photographer to take pictures and listing services. Prices for photographers can vary from $125 to $300, while those for listing services can be anywhere from $50 to $2,000. It’s important to remember that you also have to pay closing expenses and, most likely, fees to a real estate attorney or title firm. The cost of commissions is another potential revenue drain.
Should You Sell Half Of A Duplex?
It’s possible, although not always a good idea, to sell one of the halves of the property. Letting purchasers buy a duplex and rent out the half makes sense in very pricey marketplaces like those in big cities. However, it would be best to weigh the costs associated with such a transaction against the potential gains from renting out both units or selling the whole property to a single investor looking for investment properties.
Finding a cash buyer is the most straightforward approach to selling a duplex. A cash sale is distinct from a traditional listing or a for-sale-by-owner sale. Duplexes are purchased “as-is” by companies that invest in real estate and see no need for renovations.
Because they would be the ones purchasing the home, you wouldn’t even need to have it listed or pay a realtor. They are usually willing to buy a duplex with renters already in place and don’t charge any fees or closing charges.