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I own several duplexes and I have to say that they are my favorite type of income property (especially side-by-side duplexes).  The reason is that they are essentially the best of both worlds; you get a multi-unit income stream yet they are very easy to manage.

In terms of the income stream, a duplex obviously trumps a single family home simply by virtue of the fact that you have 2 units instead of 1.  Although the rent roll is not likely to be double that of a single family home because the units will be smaller, you can still count on a 30-40% bump.  Additionally, your financial risk is lower with duplexes because if one of the tenants moves out, you will at least have the income coming from the other one while you look for a replacement.  Conversely, with a single family home, if a tenant moves out then you will be getting zero rent from the investment property for at least a month. 

The rental property management aspect is also considerably easier than compared to a triplex or quad.  The reason is that in most states duplexes are not considered commercial properties.  In most states, this designation is for investment properties with 3 or more units.  Commercial properties like triplexes must deal with additional state regulations, as well as higher property tax and insurance costs.  The bottom line is that duplexes have lower operating costs.

Another benefit of duplexes is that they support an owner-occupied rental property strategy.  I have known many people who have purchased a duplex, lived in one unit and rented out the other unit to cover the mortgage payments.  This is an excellent way to be able to afford a home in a desirable neighborhood where ownership costs are normally prohibitive. 

All in all, I’d have to say that duplexes are the most desirable kind of income property for small-time investors like you and I.  There are many benefits and really no downsides relative to other property types.

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