Investing in a single family home vs duplex can get complicated.
Here’s what to consider if you’re wondering about making a duplex vs single family home
Are Duplexes Worth the Investment?
Before deciding which house is better, a duplex or normal detached home, think about this. Why are you buying a duplex anyway?
Unless you live elsewhere, the pressures of being a landlord, and living next to your tenants may be more than you anticipated. Collecting rent, fixing every little problem that goes wrong, coping with tenant rights. How will you deal with noisy or disruptive neighbours?
Unlike a semi-detached, side-by-side or up-down home with separate owners and lots, duplexes have a single owner on a shared lot. That means your tenants will have their own kitchen, bathroom, and living space. But you could be on the financial hook for costly upgrades if a duplex isn’t up to date with the fire code. Making amendments to agreements of purchase and sale if you buy the wrong home.
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Advantages of Owning a Duplex
If you’re a typical busy investor, managing a duplex vs single family home investment saves time. You can make a single visit to collect rents from multiple tenants or mow the lawn (assuming you’ve opted not to hire a property management firm or add that to the lease conditions). Property taxes and utilities can be less too than owning a single family home vs duplex investment portfolio.
Disadvantages of Single Family Home vs Duplex
A duplex vs single family home investment can be more lucrative, if only because you have multiple tenants to pay the mortgage and upkeep. Hiring a property manager to list and rent a single family home (usually 10% of the rent) is less penny wise than splitting the expense across multiple units. And selling a single family home vs duplex portfolio can take longer. Investors want rental properties they can easily manage and flip for a profit, without the hassle of selling homes individually.
Ensuring Your Duplex is Legal
Duplexes must meet Ontario building code requirements. When you plan to invest, hire a professional home inspector to verify a home you plan to purchase is a legally conforming duplex.
Being legal potentially means your new investment has:
- fire-code drywall (Type X) in walls, ceilings, or furnace rooms with common walls
- fire-rated doors and frames, with self-closing devices
- smoke duct detectors for shared furnaces
- sufficient smoke alarms and carbon dioxide detectors
- rooms and windows meet minimum size and natural light requirements
- emergency exits like windows that meet “egress” requirements for size and ease of use
- adequate parking spaces
- sufficient ceiling heights
- separate water shut-off valves in each unit
- electrical and water panels that are upsized for the number of tenants
- and more.
Check with your local municipality for zoning bylaws and building regulations. See our Vimeo video on who gets the deposit when a buyer backs out.
What If Your Duplex is Non-conforming
You may be able to operate an existing duplex that doesn’t meet current municipal zoning bylaws if it is designated a legal, non-conforming structure. Before you sign the agreement of purchase and sale, ask the seller’s realtor for proof of an occupancy permit or compliance certificate, or contact the local municipality.
If your municipality has declared a duplex you are considering purchasing illegal, you could be stuck with a lemon. Be especially wary if a real estate agent or seller suggests an illegal, non-conforming structure can be rented because the past owner did so.
Always confirm with a realtor or municipality that the previous owner had a legal right to rent the home, or you may have to make expensive alterations to meet current building codes. Pay particular attention to clause 8 in the agreement of purchase and sale. It warrants if a home’s current uses are lawful. Find Ontario building code updates here.
Why You Need a Real Estate Lawyer
Axess Law reviews the agreement of purchase and sale (APS) for your duplex investment to preserve legal rights and obligations that affect the buyer’s right to cancel. What’s involved in the real estate closing process (Ontario).
Your Axess Law real estate lawyer checks your APS for professional home inspection and mutual consent clauses that enable you to back out of an offer to purchase. Minor repairs can often be negotiated with the seller’s lawyer, while foundation issues may cause you to want to break your contract. Your Axess Law real estate lawyer advises you what to do next. We explain your legal rights and obligations if a real estate investment falls through. Documents to bring to your Axess Law appointment.
When finding a mortgage takes longer than expected, Axess Law talks to the seller’s lawyer about amending the completion date in your APS. We tell you about your legal options if a seller refuses to budge or finalize private mortgages if you need to change lenders to get financing. Qualify for private mortgages (Ontario).
When you’re ready to close real estate transactions, Axess Law conducts a property title search. We advise you how to remove a lien on a property (Ontario claims) that may block or delay your sale. Your Axess Law real estate lawyer can change a name on a house title in Ontario to add a family member when you register the property or later.
Virtual Closings for Your Convenience
Close real estate transactions from the comfort of your home with Axess Law’s virtual real estate lawyer services. Our remote video conferencing services offer secure, confidential real estate transactions. Sign legal documents and mortgage papers from any compatible home computer, laptop, tablet, or mobile device. Your Axess Lawyer witnesses your signature, and emails a copy for your records.
Affordable Real Estate Lawyers, Anywhere You Are
Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it.
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Go Online or Phone Toll Free to Book a Lawyer
Make legal appointments that work for you with our online booking form, or call toll free to 1-877-402-4277 (647-479-0118 in Greater Toronto Area) to speak with our staff. Axess Law’s licensed real estate lawyers can meet with you at any of our conveniently located Greater Toronto Area or Ottawa law offices.
We have onsite parking, and easy transit access to make your appointment go quicker.