Should I Buy the Rental House Next Door?

Owning a rental property is a great tax-saving move for many people. Not only might a property owner benefit from additional income and appreciation, but there’s also the possibility of lowering your personal tax liability due to depreciation and other rental-associated costs.

This article isn’t about the tax benefits of owning a rental property, however. Instead, it’s about whether or not you should purchase a rental property next door to your own personal residence. While there are all sorts of good reasons to buy the house next door, there are a few disadvantages as well.

Here are the pros and cons we’ve discovered over the years of owning a rental house next door to our own residence.

Advantages of owning a rental house next to your personal residence

Owning a rental house adjacent to your personal residence can offer several distinct advantages, both financially and in terms of convenience:

1. Control over renters

The obvious advantage is that you have complete control over the type of renters who will be living next to you. Sometimes, buying the neighboring rental is the only way to get rid of the riff-raff, drug dealers, or chronic partiers. The type of undesirable behavior that can drive you nuts (such as barking dogs and loud, late-night parties) can all be addressed in the lease.

2. Control over appearance

None of us like living next to a seedy old house on a weed patch filled with junk cars and trash. Owning the property next door means that you have total control over the appearance of both the house and the yard and the ability to set standards for the renters to abide by.

3. Easy to manage

If you are a DIY management company like I am, owning a rental next door is easy to show, easy to inspect, easy to maintain, and easy to keep an eye on. Yard work can be done on the same day as your personal residence, which saves both time and money.

4. Available for family as needed

For us baby boomers with aging parents, it’s nice to own the house next door in case our parents (or other family members) can no longer live in their own homes.

5. The ability to move boundary lines

Our homes all come with legal descriptions and surveys that help distinguish our property boundaries from neighboring properties. One fantastic advantage of owning the house next door is that you can have the lot lines adjusted to increase the size of your own yard. This can be done by either having both properties resurveyed and lines redrawn or by merely moving a fence to create more yards for your own personal use.

Disadvantages of owning a rental next door your home

While owning a rental property next door can offer convenience and financial benefits, there are potential drawbacks that need to be carefully considered to ensure a harmonious and profitable investment.

Owning a rental property next to your personal residence can present several disadvantages:

1. On call 24/7

Because a property owner lives next door, some renters don’t have any reservations about coming over day or night to complain about something not working right. While a property owner will want to be awakened by a burst pipe or broken furnace, minor trifles such as a faucet drip, spiders in the house, or a stuck window blind can wait until morning. These sorts of issues can all be addressed in the lease agreement, with a reasonable time frame for when the renters can call (or come over) to discuss minor repair issues.

2. Confusion about where to leave the rent check

You wouldn’t think this would be an issue, but it is! Renters who live next door to your personal residence won’t mail you the rent checks but instead will tuck them in your mailbox, under the door mat, in the door, or on your lawn furniture. To avoid confusion (and the risk of loss), it’s best to agree ahead of time on a suitable drop-off location for a rent check.

3. Harder to rent

Some renters don’t like the idea of the landlord living so close, while others don’t mind at all. In my experience, prospective tenants who don’t mind living next door to the landlord tend to be the very type of responsible renter that we’d welcome. While it does take a bit longer to find those good renters, the peace of mind a good tenant brings is well worth the wait.

Overall, owning a rental property next to your personal residence can be a convenient and financially rewarding venture when managed effectively.


An associate editor, working in tandem with global teams while residing in Minnesota. She has a strong interest in economic growth and holds board positions in various non-profit organizations.

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