Duplex Investments – Perfect for a Millennial Investor

A duplex might just be the perfect property for a millennial. A duplex is the only investment property that allows someone to purchase in the same fashion as a traditional home purchase. In fact, a duplex can be purchased with a conventional mortgage, VA mortgage, or FHA mortgage.

The way this is done is by purchasing a duplex and then renting out the second unit while occupying it. This means that there’s an alternative for millennials looking for a place to live in larger cities (aka Minneapolis or St. Paul in our market). But this alternative is one that builds equity.

Because of this, more and more millennials are deciding to take the step towards becoming investors by jumping in on this semi-unconventional but entirely legitimate living situation hack.

Paying Rent Vs. House Hacking

Lots of first-time homebuyers in Minneapolis might find themselves in a pickle because they don’t like the idea of buying their forever home, but they also don’t like the idea of shelling out such a high rent payment. People are moving back into the cities at a rate higher than we’ve seen in a long time, and with some of the first-time homebuyer credits, low interest rates, and lower down payment requirements, this is a great opportunity.

In fact, many millennials are doing what’s called “house hacking.” House hacking is where you make sacrifices in order to start building financial momentum with real estate investment properties. Rather than living in a home that becomes a large expense, you purchase a duplex with conventional or FHA lending, and then rent out the majority of the property while sleeping in the smallest room – an efficiency apartment. House hackers are living small so that they can live large later.

Millennials that choose to house hack can find themselves in a strong financial position once they master the art of investment properties. It’s never a bad idea to diversify into the stock market, pay off your debt, and invest in yourself through education or businesses, but real estate can be a foundational corner of your financial position.

Imagine – if you purchased a duplex and committed to finding ways to keep your own expenses as low as possible, you could pay off the mortgage on your duplex after 10 or 15 years. That means a 25-year-old might find themselves with a massive asset that kicks out cash and provides potential appreciation before they hit the age of 40.

Most of the millennials that we are intersecting with in our work as The Duplex Doctors are trying to be creative with the ways that they add value to society so that they can enjoy financial momentum. This means that they are starting side businesses, becoming entrepreneurs, and doing much of this in the real estate market.

What kind of business should you start as a millennial? Focusing on investment properties and property management is an excellent place to start – you can become an investor and enjoy the rewards of investing in something that can be used for both business and as a practical living situation.