Mortgage and down paymentThe idea of buying an owner occupied duplex is simple, live in one unit and rent the other. Here in the Cincinnati, Ohio area it is very viable that you can cover your entire duplex mortgage payment in full (including taxes and insurance) from the income from your tenant.

I myself am completely fascinated with the idea of living mortgage free, but how likely is it that I will truly live mortgage free at a young age … not very likely without extreme measures. I am currently 25 years old and if I continue normal payments on my mortgage, at age 45 —  I will still owe $56,562 out of the $117,000 balance on my loan. My payments will be exactly the same (except discount for time value of money).  If I paid $500 extra towards my principle every single month, it would still take me about 11 years 6 months to pay off my loan. Going 11.5 years without $500 a month is not viable or financially responsible.

So what are the options for living mortgage and rent free at a young age without piles of money? Buy a very small house (Less than 50k) or buy a duplex or multi-unit building and let the tenants pay your mortgage.

Let’s assess both options:

1295533_1(1) Buy a very small house (less than 50k):


  • Small Mortgage
  • The end is in sight, especially after a larger down payment.
  • If real estate drops 10%, you might only be talking 5k.
  • No Sharing Walls  / No Noise / Privacy


  • Often in questionable locations – and safety is an absolute must for me.
  • Often these houses need lots of costly work and effort.
  • Without cash inflow from the property– you will never be free of payments entirely, taxes and insurance are still due yearly.

1278958_1(2) Buy a Multi-Unit Home or Building (Such as a Duplex)


  • If you land a good tenant, your entire mortgage (including taxes/insurance)  is usually covered (in some regions of the US)
  • You qualify for deductions
  • Certain expenses are half-deductible for duplexes (for example painting the exterior or landscaping).


  • You are a landlord, which comes with all kinds of trouble. For example, you are now subject to state landlording laws and possible legal action from your tenant.
  • Even though you have an expense Duplex (or multi-unit), you may not be able to itemize since you have half of it rented out and half of it is depreciated over 27.5 years.
  • Sharing Walls / Noise / Less Privacy
  • Don’t forget you get taxed on any profits

So which makes more sense? Around where I live, I could easily find a house for $72.5k or less which would keep my estimate payment under $500 a month all in (taxes / insurance / everything) or I could find a duplex and most likely pay $0 a month and possibly break just about dead even after taxes (effectively living completely free in a duplex). I suppose it all boils down to this: $500 a month with a small house or $0 a year with a duplex where you have a tenant and have landlord duties. Tough call.

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