You’ve likely heard of a duplex, but do you know what a triplex is?
Well, the two structures are similar, but a duplex has two units while a triplex has three.
If you’re wondering if this type of building could be the right one for you, keep reading.
We have everything you need to know about triplexes.
1. What is a triplex?
A triplex consists of three individual dwelling units combined into one building.
Each of these individual units will share one or two common walls depending on where they are located.
Each triplex unit will have its own…
Kitchen
Bathroom(s)
Living room
Separate doors to the outside
Address/unit number
Triplexes are similar to duplexes or fourplexes.
However, instead of the property being a two or four-unit structure, it’s a three-unit multifamily structure with one owner.
In some cases, a triplex was constructed with the intention of being a triplex, while in others it was built as a large, single-family home and later divided into three separate dwellings.
2. What qualifies as a duplex, triplex, or fourplex?
Realtor.com defines a single-family home as a “structure maintained and used as a single dwelling unit.”
This property is stand-alone.
It has no shared walls or roofing.
It has its own yard.
It doesn’t share utilities with another home, and it has its own private and direct access to a street or thoroughfare.
On the other hand, a duplex, triplex, and fourplex are designed to hold a designated number of families and have a specific number of dedicated entrances.
Duplex: A building with two separate living units, either side-by-side or one on top of the other
To qualify, each unit of a duplex must have a separate entrance, kitchen, bathroom, and utility meters
Triplex: A building with three separate living units and all the named amenities in each of the units
Fourplex: A building with four separate living units and all the named amenities in each of the units
If the units are joined by a common wall and roofing structure and the property does not have five or more units, then the property qualifies as a “-plex” configuration.
3. How is a triplex sold?
A triplex is technically considered multifamily real estate and is sold as one building that an owner usually rents out as three separate units.
That said, the owner will also sometimes live in one of the units while renting out the other two.
A third option is to live in one of the units with family members in the other two.
Overall, however, triplexes are purchased for investment purposes, and this is typically why someone will look to buy them.
4. What are the benefits of a triplex for a tenant?
Before you decide to rent a triplex unit, you should know what to expect.
Here are the benefits:
Amenities: Triplexes often have in-unit amenities that are desirable to tenants, like laundry, driveways, patios, porches, and sometimes garages.
While a triplex is similar to an apartment complex in some ways, these amenities make it feel more like a house.
Privacy: Compared to a traditional apartment building, a triplex is much more private.
You won’t have to deal with as many neighbors, which affords you increased privacy.
Outdoor space: The outdoor space available to the triplex will be shared by only three families or tenants.
This is a significant upgrade from the small yard shared by numerous tenants that are often provided in an apartment complex.
Spacious: Triplexes can be among the largest units you’ll find on the market.
They’re often popular with families because of how spacious they are.
5. What are the downsides of a triplex for a tenant?
And likewise, before deciding to rent, you should also know the disadvantages.
We’ve listed them below.
Sharing with your neighbors: Not everyone loves the idea of sharing with their neighbors.
A triplex will have shared common spaces and amenities, like driveways and outdoor recreation spots.
Additionally, you’ll also share 1-2 walls with your neighbors, which means noise issues could arise.
Disagreements: Having issues and disagreements with neighbors is no one’s favorite part of living near others, and it’s more likely to happen when you’re in close proximity and sharing walls.
Not widely available: Triplexes are far less common than larger apartment buildings, or even duplexes and fourplexes.
If you have your heart set on finding a triplex, then you may be out of luck!
6. What are the advantages of a triplex for a landlord?
Are you considering the purchase of a triplex?
Here are some of the advantages that you may encounter as a landlord.
Good investment
If you’re looking to invest in a larger multi-family property, then a triplex is a great starter option.
High rental yield
You can rent out all of the units, generate a high rental income, and pay off your entire mortgage fast!
You’re able to live in one of the units if you choose to
Do you need a place to live?
Do you want to be a hands-on landlord?
Do you want to have a spot for extended family to live as well?
If so, a triplex is a great solution for all these situations!
You’re close by whenever repairs are needed
If you’ve been a landlord previously, then you know it can be a hassle to have to drive across town to deal with repairs for tenants.
If you’re already living onsite, you’re able to handle repairs whenever they come up.
You have certain tax advantages
There are several tax advantages to having a triplex.
This includes writing off maintenance costs, repairs, and depreciation for the rental units.
You can make repairs more efficient
As all three units share one roof, one yard, and other common areas, you’ll be able to make repairs more efficiently when they need to happen.
You can write off utility bills
Did you know that if you pay utilities as the landlord, then you can write off the utility bills for the rental units?
That’s a great way to save some money!
7. What are the disadvantages of a triplex for a landlord?
As always, there are reasons why a triplex doesn’t work for everyone.
Here are the downsides.
It’s a more expensive real estate investment option
Compared to a single-family home or a duplex, triplexes are much more expensive; thus, you may not have the capital to invest in one.
It can be difficult to sell
Triplexes can be more difficult to sell because they are more expensive than single-family homes.
In addition, the added complication that comes with having two different tenants can be a turn-off for many first-time investors.
It can be uncomfortable to live so close to tenants
As a landlord, you may not want to live so close to your tenants.
If you end up having any issues or disagreements with the individuals living in the other units, then you still have to be their neighbor.
Some landlords would prefer not to mix their work life and their home life.
Triplexes are less common than duplexes or fourplexes
If you’re looking specifically for a triplex, you may end up being disappointed.
Triplexes are notably less common than duplexes or fourplexes, so you may not be able to find one if you’re looking.
You may not be able to use the full rental income to qualify for a mortgage
Mortgage lenders will typically not allow you to simply deduct the projected rental income from your mortgage payment for the purpose of qualifying you for a loan.
Rather, it is often added to your overall income.
In addition, you may only be able to factor in 75% of the total rental income since banks like to be conservative.
In practice, this means that the income from the rental units will only help you size a slightly larger mortgage than what you would otherwise qualify for.
Here’s a basic example:
- You make $60,000 per year, which qualifies you for a $2,000 monthly mortgage payment
- You expect to receive $2,000 in rental income from the triplex you wish to purchase
- $18,000 in annual rental income (or 75% of the total rental income) is added to your $60,000 income, allowing you to qualify for a monthly mortgage payment of $2,600
8. What are the financing options?
When you’re financing a duplex, triplex, or fourplex, you have different options available to you.
Here are some of your options.
Conventional residential mortgage
Owner-occupied loan
FHA and VA loans
Finance as an investment or rental property only (more difficult)
Sometimes, owners will use rental income to qualify for the loan.
Lenders will typically want an existing signed lease agreement to verify the rental payments and two years of rental history.
For real estate investors, you’ll need a higher down payment (20 to 30 percent for the best interest rate) to secure traditional financing as banks consider these purchases to be higher risk.
9. What are the costs that affect cash flow for a triplex?
When you’re thinking about financing a triplex, remember that you need to determine your cash flow for your mortgage.
The lower your monthly payment is and the higher the rent, the greater the income your property will generate.
Here are the costs that will impact cash flow:
Principle and interest payments
Property taxes
Homeowner’s Insurance
Repair/maintenance costs
It’s good to remember that renters do not need to pay your mortgage entirely.
If they reduce your mortgage payment by 50% or more, then your payment is much more manageable.
Another bonus to having renters is that you can build equity faster than you would be able to on your own.
10. How much rent can you charge for a triplex?
How should you determine what the rent will be for your tenants?
The easiest way to do this is by doing a quick search on a website that shows rental listings.
This will give you an idea of what landlords are charging for similar properties.
11. What are taxes like?
Tax on any “plex” property is inherently more complicated.
When the property is owner-occupied, you’ll have the advantages of homeowner tax deductions.
However, if you choose to rent out all the units, then you may find other deductions as well.
When it comes to taxes, work with a tax professional or CPA.
They can guide you on how to handle taxes.
12. What’s the difference between a triplex and an apartment?
The primary difference between a triplex and an apartment building is scale.
A triplex only has three units, while apartment buildings often have many units (sometimes hundreds).
For many tenants, living in a triplex is more similar to the experience of living in a single-family property.
It provides more privacy than a classic apartment building but fewer amenities than a Class A or B apartment.
13. How to find a triplex for sale near you?
Are you interested in finding a triplex near you?
Are you wondering if it’s possible since they’re hard to nail down?
Here are some ideas on where you can look.
Real estate websites
The fastest and easiest way for you to find a triplex for sale near you is to look online.
Sites like Zillow are an example of places that you can look.
“For Sale” signs
Sometimes you can find a triplex available near you just by keeping your eyes open for a “For Sale” sign.
When you find one, take note of the names and phone numbers on the sign so you can get in touch with the owner.
Investors
If you’re having trouble finding the property you want, don’t be afraid to tap into your network of real estate investors.
Experienced investors can help you find properties that may not be available on the mainstream market.
Don’t be afraid to ask your friends and contacts!
Real estate agents
If you’re not feeling confident about your ability to do it on your own, work with a professional!
Real estate agents are experts at finding property, and they can help you with your search.
Reach out to an experienced agent in your area to get started.
Final thoughts
What do you think?
Is triplex life for you?
A triplex allows you to enjoy some of the perks that you’d otherwise miss out on in a standard apartment.
However, it doesn’t quite give you the same space and amenities you’d have in your own single-family home.
Additional Resources
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Disclaimer: we are not lawyers, accountants or financial advisors and the information in this article is for informational purposes only. This article is based on our own research and experience and we do our best to keep it accurate and up-to-date, but it may contain errors. Please be sure to consult a legal or financial professional before making any investment decisions.
Prior to starting Gokce Capital, Erika received a Bachelor of Architecture from the University of Southern California and a graduate degree in Urban Policy from Columbia University. She worked as both an architectural designer and engineer in New York before joining the New York City Department of Housing Preservation and Development.
Erika currently lives in the New York Metropolitan area with her spouse, daughter and cat. She is originally from Chicago and still considers herself a midwesterner at heart.
Erika also loves to read, write and travel (fun fact, she has visited all 50 states and more than 30 countries!). Her new book, Land Investing Mistakes: 11 True Stories You Need To Know Before Buying Land, is now available on Amazon.
Hi Erika,
I have a question. I am planning to rent a unit ‘C’ of a triplex but it doesn’t have a mail box for unit ‘C’ but there are mail boxes for unit ‘A” and ‘B’. Is it legal? Can I ask the landlord to put in one more mail box for my unit ‘C’?
Thank you,
T Vorghin
Hello T, I would recommend speaking with a local lawyer, but it does seem to me that you should be able to ask for a mailbox!
If you are living in one of the units are your units as a landlord are expenses for water, sewer, garbage and maintenance and finance also a business expense?
Hello James, I would check with your accountant. I believe only the portion of the expenses associated with an office space in your personal residence or unit could be considered a business expenses, but, again, I am not an accountant so I would verify this.