What if I told you, you could own not one, but two or maybe even 3 properties, with a low-down payment and have others help pay your mortgage?
(Pinch yourself) This is not a dream.
If you are a first-time home buyer and your lifelong dream is to own a home, listen closely (well, in this case, read closely.)
You could lower your monthly payments and even live for free by Home Hacking.
Home hacking is the popular term used for buying a multi-family home where you live in one unit and rent out the rest.
So, what are the benefits of buying a multi-family home?
I'm glad you asked!
Here are seven benefits when buying a multi-family Property.
Lower Mortgage Interest Rate
Buying a multi-family home with an FHA loan, may get you a lower interest than you would for a traditional mortgage. That's because the Federal Housing Administration (FHA) insures loans made by approved lenders, which can sometimes result in lower interest rates for buyers.
Low Down Payment
When you finance a multi-family home one of the biggest benefits is that you only need to put down 3.5% when you finance with an FHA loan. That's significantly less than the 10% or 20% down payment that might be required for other types of loans.
Lower Monthly Mortgage Payments
Would you like to have a lower monthly mortgage payment? owning a multi-family home like a duplex or triplex can be a great option. Your tenants' rent will help cover your mortgage, property taxes, and other associated costs, freeing up some extra cash flow each month.
And if you make payments towards your principal with the extra cash you could lower your monthly payment even more.
More Square Footage for Your Money
When you buy a multi-family home, you're effectively getting more square footage for your money. This is especially true if you plan on living in one of the units and renting out the others - you'll have plenty of space to spread out and enjoy your own home while also generating income from your tenants.
Potentially Higher Resale Value
Because duplexes and triplexes are in high demand, they often sell for more than comparable single-family homes. This means that when it comes time to sell your property, you could potentially make a hefty profit - especially if you've made improvements to the units during your ownership.
Easier Property Management
Living in one of the units allows you to keep an eye on your tenants and make sure they're taking good care of your investment property.
Multi-family Homes with Single Responsibility
Property expenses like, property taxes, home insurance, home repairs and property management will be cheaper because is one single property.
How Can You Qualify for a Mortgage for Multi Family Homes?
First, hire a realtor and a loan officer with expertise doing an FHA loan for a multi-family home.
Second, fill out the application and provide all the documents.
Third, this is more after you get pre-approved, but it is very important. Look for a property that meets the criteria needed for the loan to get approved.
Takeaways:
Bottom line, if you're thinking about buying a home, consider investing in a multi-family property. Because the down payment is low if you go with an FHA loan (owner occupied). Your tenants will pay for a portion of the monthly mortgage payments.
Once the property is paid off you will be generating rental income from your tenants.
Long-term owning a multi-family property could be your way of creating generational wealth by building your investment portfolio with rental properties.
You could have tax benefits by owning a rental property (contact your accountant for details).
I don't know if this real estate investment option is a good fit for you, but I can tell you that buying a multi-family property has more benefits than a single-family home from a real estate investing point of view. I'm not saying buy an apartment building, no but buy a property with multiple units if you want your property to generate additional income.
Hire a Professional:
Are you interested in taking the plunge and start collecting rent with your first multi-family property?
Fill out the form below to schedule a free consultation.
Thank you!
Thank you so much for reading and if you found this article useful share it with others.
My mission:
To guide, inform and inspire you to take the 1st step towards your best life. Buy or sell homes with confidence. -Jury Hernandez, Broker Associate
