Fridays with the Fiddle Fig: Purchasing multi unit properties
This week's topic: Purchasing Multi Unit Properties
This is a topic we cover a lot with our buyer clients. We ask what their goal is with this purchase and often times we get someone saying that they want a property with multiple units but are worried about the higher cost of that up front. Here are a few insights we share when going over this topic:
A multiple unit property is a much better long term investment. You have more flexibility with what space you occupy. So if you are ever in a place where you need the extra money, you can move into the smaller unit and make the extra income from the larger one. Or you decide to move out of the property and let it pay for itself by renting all of the units. So it gives you more
One big concern buyers have is that they won’t be able to qualify for a larger loan in order to afford the property. The lender is actually able to take the money that’s earned from the additional units and count it towards your monthly income. So it makes the property more affordable since it increases your income for the mortgage.
Lastly, by buying a single family house at say $550,000 or buying a multi unit a $700,000 often times, when running the numbers and you include the rent from the additional unit, that client is responsible for a much smaller payment for that single family home. So their total monthly expense can actually go down in comparison to a single family house.
If you are interested in purchasing a home with multiple units then let’s sit down and discuss what your options are and whether or not it would be a good fit for you and your unique circumstances.