If you haven’t read More Than Home, a blog about why I think you should choose to purchase a duplex for your first home, please do! I also hope you got the opportunity to read the last blog I wrote, Buy a Money Maker, which was a more in-depth follow-up specifically about income-related topics related to owning a duplex. Just to recap, the three main reasons your first Mt. Vernon real estate purchase should be a duplex are:
- Earn extra income right away
- Use this extra income to purchase additional properties – increasing your “empire”
- Get the most bang for your buck upon resale
This week I’m going to expand on the concept of creating your own real estate “empire.” Really I’m talking about your real estate investment profile or portfolio, and why owning a duplex is an almost surefire way to jumpstart the process of making a return on the investment you’re about to (or have) made – if that’s your goal right now.
Define the Purpose of Your Mt. Vernon Real Estate “Empire”
By this I mean decide how your “empire” is going to play into your financial life. If you plan on holding on to your purchases to make rental income, a duplex is kind of like a two-for-the-price-of-one deal. If you’re looking for a home and thinking forward to retirement and future investment returns, you may be less interested in immediate income from your extra space, and more interested in holding on to your property for yourself – until it’s time to move.
Types of Empires
I figure there are at least three different kinds of “empires”:
- The Functional Empire – You probably live in this type of empire. It’s the smallest type of empire – and technically only the beginning of one.
- The Saver’s Empire – You may or may not live in this empire but you own it! It can grow to cover vast swaths of land, but probably isn’t making you money right now.
- The Income Empire – You probably don’t live here and you own the properties in this empire. This can be a small or large empire; it’s defining characteristic is if you own it, it’s hopefully making you money.
In this article at MoneyUnder30.com, writer Sarah Davis sums it up quite succinctly:
“If you buy your multi-family unit with the intention of living in one of the units, the time may come when you’re ready to move out and get something bigger. In that case, you may choose to sell the multi-family unit. If you don’t absolutely have to sell it in order to qualify to buy the new house, consider getting a tenant in the unit you were living in and keeping the whole thing as a rental. Having already been a landlord for your neighbors, being a landlord for one more family won’t be too much of a shock.”
All of these options work for different homebuyers in different situations. Some property owners never purchase more than their first home! Others go on to build and expand their real estate holdings in hopes of securing extra income now or in the future. Still others buy and hold onto property until it appreciates in value, at which time they consider reselling.
Next week I’ll talk about the perpetual endgame in real estate: Resale. For now, I hope you learned a bit more about why buying a duplex for your first home is a good idea – and how it can be lucrative now and in the future. If you have questions about Mt. Vernon real estate or would like to get started, give the Dominic Pettruzzelli Real Estate Team a call at 360-610-7256.