However, when buying investment property in the form of a duplex, you can double that rental income. So, in this sense, you have one of two options: First, you rent out both units. This way you are sure to double your rental income. Either way, you are making money in real estate, which is your objective from the very beginning.
Discrimination when tenant selection is required
AN OWNER-OCCUPIED LOOPHOLE - There are exemptions to the Fair Housing Act for owner-occupied buildings with no more than four units, which means that I am not obligated to rent to families with children. However, it is still illegal for me to advertise my apartment as such (i.e. "Great Rental Unit for Single People, Couples with no Children" or "Duplex for Rent - No Kids, Please.")
Duplex tax deductions
Not all improvements are tax deductible for a duplex. When painting the exterior of the duplex, you can only deduct half of the cost from your taxes - this is because only HALF of the duplex is rental property - the other half is your private residence. If renting out both halves of the duplex, the entire expenditure would be a tax write-off.
Mortgage interest deduction for a duplex
You can claim only half the mortgage interest as a rental expense if you rent only one unit on Schedule E.
To claim the remaining half for the unit in which you reside, you must itemize deductions and report it on Schedule A.
In addition, you can claim the interest you pay on loans you take out to make improvements to the rental unit.
Relevant Information:
Rental Property Depreciation in 2020 |
Protect your investment income, no matter what. Avoid Eviction |
Property Management Accounting with Quickbooks |
Deductible Rental Schedule e Expenses |
Tenant Move in Inspections for Rentals with PDF Checklist |
Cozy.co vs Avail.co |
Rental Property Accounting - two tips you cannot do without |
Rental Property Security Deposits |
You Need a Rental Application |
Screening Your Tenants - The Basics |
Rental property bookkeeping and why you need it |
What is Leaseze |
Verify Your Tenant Applicant’s Income The Right Way |
Check Past Landlord References |
Fake Paystubs and Income Verification |
MANAGING YOUR RENT, LATE FEES AND GRACE PERIODS |
Rental Property Management Mistakes |
PAYMENT of RENT WITH VENMO, PAYPAL or ZELLE |
Rental Property Tenant Onboarding |
Many Landlords Are Accidental Landlords |