Buying a Duplex With Family – Appleton WI

Read This Before Your Buy a Duplex With Your Family….

buying a duplex with family

If you’re considering buying a duplex with family, this is the article for you. My name’s Carter, and I’m a real estate agent with Crowley Real Estate and Century 21 Affiliated, and today we’re going to be discussing buying a duplex with family members, or possibly buying a property and then you’re splitting it evenly, like a 50-50 ownership interest.

The most common scenarios that I’ve seen this in is, possibly your relatives or whomever is aging, and they want something that’s very maintenance-free. They can’t afford to go into a condo, but they would like to live close to their family members. So what happens is, the kids or another relative, they buy a very nice side-by-side duplex. With that said, what typically happens is the relative or the new owner, they buy the entire duplex, they rent it out to the other relative, and then they each live in one unit.

This is most common for side-by-side duplexes. It can be possible for upper-lowers, but again, I’ve seen it most often with the more expensive side-by-side units.

Things to Watch Out For or Do When Buying a Duplex With Family

What do you get, or what should you be aware of when you’re buying a duplex with your family members? Just have everything in writing. Don’t have verbal agreements because in some cases, even though they’re your family members, people may go behind each other’s backs. And something can happen, and it’s better to have it in writing than not having it all.

Then there’s the legal obligation of things, and you don’t have to worry about whether it’s getting paid, having bills reimbursed. Or if you come into financial hardship or anything like that, you can have everything outlined and you know what to do. So that’s what I would say, have everything in writing, make sure everything is documented. Next… Treat them as if they are a tenant. 

Even though they’re your family member, this is an investment for you. You’re buying a duplex to get some sort of return on your investment. And if your family member’s like, “Well shoot, I can’t pay the rent for this month or the next month or the next month,” well now you’re earning a negative percentage on your investment, and it really doesn’t make sense for you to purchase a side-by-side duplex if you’re not getting any sort of money out of it, or advantage to doing such a thing.

So that’s what I would say, treat them as if they were a normal tenant. And this can be the difficult situation with renting to family members, because if they run into something you want to give them the benefit of the doubt, and do whatever you can to help them, which I completely understand, I’m like that myself.

Lastly, make sure you do you due diligence on the property before buying it. Say a family member passes away or moves out, can you still afford the mortgage on your own?  Make sure you get the best financing for it, meaning that you take advantage of an owner occupied loan versus getting income property financing. If you’re owner occupying your property, you can get cheaper financing than the typical 20 to 25% down on rental property.

Shop around with different lenders. I can provide you with lender resources if need be.

Wrapping Up

If you have questions or you need assistance in the process, just reach out to me, I would love to help you out. Again, you can call me, or even text me on my cell phone, which is (920) 252-2864, I would love to help you. Or just fill up performed down below, and we can get in touch there. Thanks so much you guys, and have a great day.

Buying a Duplex With Family
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