If you’re thinking of building a new property, a duplex presents a unique opportunity. You can design a custom home for yourself while simultaneously creating a way to earn rental income. These properties are far outnumbered by single-family homes in the U.S., but you may still find them appealing. Here’s what to know if you’re considering building a duplex.

What is a duplex home?

A duplex is a property that has two separate but attached residences in one structure. This type of housing is considered a multi-family home, and it’s basically a cross between a single-family home and a townhome. As of 2023, there are more than 2.18 million duplexes in the U.S.

Duplexes are often constructed by developers or investors who want to maximize their rental income by offering two units instead of one. Private homeowners may also buy or build one if they want to live in one unit and rent out the other. Duplexes are also a useful way to enjoy multi-generational living with some (literal) boundaries.

Many duplexes are multi-level and feature one shared wall along the center of the property. Each unit in a duplex has a private entrance, with the properties typically oriented side-by-side. They may also be oriented with one unit on the ground level and the second unit on the upper level, sometimes called one-up one-down duplexes.

Costs to build a duplex

The cost of a duplex is less than that of a single-family home. The average price tag to build a new duplex is between $285,000 and $537,000 nationally, according to Fixr. Building a new single-family home, meanwhile, costs within the range of $390,000 and $710,000.

As you might imagine, the cost to build a duplex depends on a variety of factors, including location, materials, square footage and labor costs. Most people can expect to pay about $130 per square foot for a midrange duplex, according to Fixr. A side-by-side duplex is likely to be more expensive to build than a one-up one-down, since they have a bigger footprint and a larger roof, which increases the cost.

Here are some specific costs to consider when building a new duplex:

  • Engineering: The average cost of a structural engineer is between $100 to $200 per hour, according to Angi.
  • Contractor: Your contractor is likely to charge per project. Contracting fees typically fall between 10 percent and 20 percent of the total budget, according to Angi.
  • Foundation: Foundation costs vary largely depending on the size of your home and the type of materials used. The price per square foot for popular options include: monolithic concrete slab at $5 to $14, stem wall concrete slab at $5 to $6 and pier and beam at $7 to $11, according to HomeGuide.
  • Framing: Framing is a crucial construction step, as it creates the structure needed to apply drywall (inside) and siding (outside). Framing hardware costs run $4 per square foot and labor and lumber costs at $9 to $21 per square foot (depending on the type of wood), according to Thumbtack.
  • HVAC: If you want to add central heating and cooling systems to your duplex, you will likely need separate systems for each unit. Angi puts the average cost of a full HVAC system at $7,500.
  • Flooring: The average cost of new flooring is about $15,400 to $82,300 for a 2,200 square foot house, according to Angi. However, some materials are much more expensive than others. Carpet and linoleum are on the more affordable end of the spectrum, while hardwood is typically the most expensive.
  • Electrical: Much like HVAC systems, electrical costs may increase in a duplex because you’ll you need separate systems for each unit. The cost per square foot on new construction is between $4 and $7, according to Fixr. Electrical outlets cost $85 to $275 each, and switches average $75 to $275 each.
  • Plumbing: For this crucial step, you also expect costs of between $75 to $150 per hour per plumber, according to Fixr.

Other costs to keep in mind

Aside from the materials and labor associated with building a duplex, there are additional costs associated, including land, building permits and more. Be sure to account for these items in your budget.

  • Land: New builds require purchasing land to build on, which may include loan fees and interest if you finance the purchase.
  • Permits: Each step of your construction process will likely require a building permit. The types and costs will vary by location.
  • Demolition: If you buy a house to tear it down and build a duplex in its place, there will be demolition costs and costs associated with clearing the land.
  • Design: Factor in costs for painting and finishing once the home is complete. Lighting and kitchen and bathroom fixtures can add up.
  • Double the expenses: Since a duplex is two individual residences, it requires two of everything: kitchen appliances, front doors, water heaters, etc. Make sure your budget can accommodate the doubling up.

Bottom line

Duplexes can present a good investment opportunity, or an opportunity to earn some rental income while also serving as your primary residence. Be sure to budget carefully before building one, keeping in mind that since it’s two separate residences, you will need two of everything. If you’re financing your purchase, compare interest rates before taking out a loan.