How to Buy a Duplex: Step-by-Step Guide for Beginners
- Nate Jones, CPCU, ARM, CLCS, AU
- Nov 8
- 2 min read
Buying a duplex can be one of the smartest moves for new real estate investors. Why? Because a duplex offers two rental units under one roof, giving you the chance to earn more income, reduce vacancy risk, and even live in one unit while renting out the other.
If you’re wondering how to buy a duplex in 2025, this step-by-step guide will walk you through the process—from financing to protecting your investment.
Step 1: Understand the Benefits of Buying a Duplex
Before you start searching, know why duplexes are popular:
Dual Income Streams: Two tenants mean more consistent cash flow.
House Hacking: Live in one unit and let the other pay your mortgage.
Lower Entry Cost: Easier to finance than a large apartment building.
Step 2: Get Pre-Approved for Financing
Financing a duplex is different from a single-family home. Common options include:
Conventional Loans: Usually require 15–25% down for investment properties.
FHA Loans: Great for house hackers—only 3.5% down if you live in one unit.
VA Loans: Eligible veterans can finance a duplex with zero down if occupying one unit.
Pro Tip: Lenders often require insurance coverage before closing. More on that below.
Step 3: Choose the Right Location
Location determines your success. Look for:
Job Growth: Strong employment markets attract renters.
Low Vacancy Rates: Indicates healthy rental demand.
Amenities: Schools, transit, and shopping increase desirability.
Step 4: Run the Numbers
Before making an offer, calculate:
Cash Flow: Monthly rent minus expenses.
Cap Rate: Net operating income ÷ purchase price.
ROI: Annual return compared to your investment.
Don’t forget to include insurance, property taxes, and maintenance costs in your calculations.
Step 5: Inspect the Property
Hire a professional inspector to check:
Roof and foundation
Plumbing and electrical systems
HVAC units
Shared walls and soundproofing
Step 6: Protect Your Investment
Buying a duplex isn’t just about closing the deal—it’s about managing risk. Fires, storms, and liability claims can destroy your profits if you’re not covered.
Most lenders require Duplex Rental Property Insurance, which includes:
Property Coverage for fire, wind, and other perils
General Liability for injuries on the property
Loss of Rents coverage if your units become uninhabitable after a covered loss
At Wexford Insurance, we specialize in Duplex Rental Property Insurance nationwide. Wherever your duplex is, we can help you find affordable coverage.
Step 7: Close the Deal
Once financing, inspections, and insurance are in place, you’re ready to close. Congratulations—you’re officially a duplex owner!
Final Thoughts
Buying a duplex can be a smart move for beginners and seasoned investors alike. Follow these steps, run the numbers, and protect your investment with the right insurance.
