How Much Does It Cost To Build a Duplex?
If you are a real estate investor, maybe you are asking yourself, "how much does it cost to build a duplex?" Maybe you don't know where to start, and that's completely fine. In today's market, there is a ton of competition. It's almost like every real estate investor is looking for some kind of multi family asset, and we don't blame them one bit.
On top of the competition, you also have other factors that will determine how readily available purchasing a duplex or multi family can be. For example, the value of properties may be on the higher end, with less inventory.
That's why real estate investors will oftentimes turn to building new development. All you have to do is purchase the land and start building your duplex.
What to consider when you build a duplex
There is no exact answer when it comes to the cost of building a duplex. However, according to Fixr, if you are building a duplex with 900 sq ft units, then on average it can cost about $277,000.
Having a ballpark idea of what the cost to build is great, however, you need to take into consideration other factors such as finishes and size. If you are looking to build a larger duplex, than it will cost you more to build. This applies to the finishes as well. Some real estate investors are trying to build a duplex with rental grade finishes. Other investors may be looking to build a more luxurious duplex. Building a duplex with higher-end finishes is going to cost you more to build.
Do your due diligence before building a duplex
It is not wise to just start building a duplex without first doing your homework. You need to study what kind of market you are getting into first before making any moves.
You will first want to make sure there are lots you can buy with the zoning you need. Getting more familiar with the pricing of lots in that location will also help.
First off, you will want to scope out the construction costs in the area you are looking to build a duplex in. What is their material cost and labor costs?
You will also want to find out what the building permit process is like and how much time it will take.
Knowing what is in the pipeline of getting built in the area is also something to keep in mind. Is there a retail center that is going to be built across the street from the newly built duplex?
Next, it's very important that you figure out what your duplex will be able to sell for once completed. Knowing what your rental rates are in the area will also help you.
It's also important to understand how that market is performing. Are there buyers for new duplexes? Are there a lot of potential tenants in the area?
Before you begin building a duplex, it's important to know what floor plan you would like to build. Knowing exactly what kind of design you want will be vital when you meet with your contractor.
Remember though, the larger the duplex you build, the more it will cost you. Also, the fancier your design, the pricier it will be. So keep those factors in mind when you are decide to start building a duplex.
Overall, you will want to make sure that the cost to build a duplex makes sense in the market you are tackling. If you want a higher return on investment, being familiar with your market and adjusting to it, is key.
So go ahead and start your due diligence and see what kinds of lots you can purchase to build a new duplex.
If you have any questions throughout the process, feel free to reach out to us.
Simply fill out a contact form, and let us know what question you have. We are always here to be a resource to you!