Considering purchasing in a multi-family home? For some
people the multi-family home is a great way to go, with many long term
benefits.
A multi-family home is a home with two or more rental units.
The most popular for the 1st time home buyer home is the two family
home. These homes offer the best square footage and easy landlord management
(you only have one rental unit to take care of).
There are many benefits a multi-family property can offer.
The following are a few example good examples:
1) When a buyer applies for a loan, the income derived from
the rental unit(s) can be incorporated into the loan equation, increasing your
purchasing power and possibly increasing your loan amount.
2) The income earned each month from paying tenant(s) will help
to offset some mortgage payments, property taxes and utility expenses, reducing
out of pocket cost to the property owner. No single family home or condo can do
that.
3) Over time, the rental income will increase because of
market rents. After a few years, the out of pocket expenses reduce and income
increases to the owner. It's not unusual to see a multi-family owner purchase a
single family home, keeping their multi-family home too. At this point the
rental income can support the property itself and allows the owner to purchase
a second home. Now the owner has an income property which is a nice little nest
egg for future use. I've seen, over my years as a REALTOR, home owners
accumulate more than two homes increasing their rental income.
In the past few years, the multi-family market has changed.
In 2007, investors were purchasing these homes and then converting them into
condos, selling each unit off separately. These purchases increased the market
value of the home to where they were un-affordable to the regular owner
occupied buyer. When the market crashed, prices dropped dramatically, but the
damage was done. There are now less conventional multi-family rental homes than
before. The banks are stricter in their lending practices, leaving a struggling
market place for multi-family homes.
Waltham’s
rental market is on the up swing for the moment as I write this. In the past month, rental prices have
increased on an average of 12% and are still rising. 2002 was the last time the
rental market had a boost like this.
For the some people a multi-family purchase is a great
stepping stone and can be a lucrative investment.
Tags:
Multi-family home , Waltham , Home , Real Estate
Kenneth Brown
