Can you split a duplex into two separate properties?

May 4

A common question I receive from my clients who are purchasing a duplex is if a duplex can be split into two separate properties. Often times this question comes from real estate investors who may find it beneficial for a myriad of reasons to run the properties as two separate units. Other times this question comes from buyers who intend to make the duplex their primary residence and sell the unit they do not plan to use. Let’s start with the basic of what a duplex is. This information is for entertainment purposes only and is not to be construed as legal advice.

What is a duplex?

A duplex is a property that is under one roof but is split into two separate living units. These units often have separate addresses, utility metering and living quarters but share one roof and a wall. Duplexes are popular amongst investors who want to purchase two units and have them located next to eachother. Another use for duplexes is for what is often referred to as “house hacking”.

What is House Hacking?

House hacking is the process of buying a duplex, living in one of the units, and renting out the other unit. House hacking become popular through the Real Estate podcast Bigger Pockets as a quick and cheap way to get into real estate investing. Often times house hackers are able to pay most, if not all, of the mortgage through the rental income the receive from the tenant in the other unit.

Can You Split a Duplex into Two?

The short answer is probably not. Most duplexes are zoned as multi-family units and splitting the unit into two separate properties would violate local zoning laws. Of course, it is important to check the laws in your local municipality to see if they allow for splitting a duplex into two separate units.

If the duplex is legally defined as two separate units and each unit has its own entrance and separate utilities, it may be relatively straightforward to split the duplex into two properties. However, if the duplex is not currently configured as two separate units, it may require significant renovations and potentially even changes to the building's structure to make it possible to split it into two properties.

Splitting a duplex into two may not only be illegal in your city, it can pose some serious logistical challenges. A duplex shares utilities, a roof, walls, and a foundation. In the case of a major repair that is needed it would cause significant confusion as to who is responsible for paying for the repairs. I often get the question “can you split a duplex into two” and I always refer my clients to check with their local municipalities. As a real estate agent I highly recommend against purchasing a duplex with the intent to split it into two separate units.

Duplex Realtor

As a realtor who works with investors, I represent a lot of clients who are purchasing duplexes. If you are a real estate investor who is looking to purchase property in Arizona, I would love to chat. I am an investor real estate agent and a duplex realtor who works with investors all over the state of Arizona.

Duplexes in Arizona are becoming difficult to find. A lot of duplexes are being taken off the market by major investment firms ,such as Blackrock, and being used as part of their buy and hold strategy. When buying a duplex it is important to work with a realtor who can search for off market deals and advocate on your behalf.

Duplex Investing

When investing in a duplex be sure to do your due diligence. You should consider multiple factors before making a duplex real estate investment:

Location: how is the surrounding area? Is there potential for long-term real estate development?
Cap Rate: What is the cap rate on the property? Does it meet or exceed your minimum cap rate?
Forced Appreciation: Are there opportunities to force appreciation by value-add, renovations, or additions?
Occupancy/Vacancy Rate: What is the anticipated vacancy rate of the property? How much will it cost you if your vacancy exceeds the average rate?

In conclusion, there are multiple factors that can determine if you can split a duplex into two units or not. If the property is zoned as two separate units, the odds are good that you are able to split the duplex into two units. However, always be sure to check with your local municipality on local laws regarding splitting duplexes into two separate units.