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Getting A Multi-Family For Your First Home
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Getting a multi-family property for your first home can be a wise first choice
for certain buyers. Of course, becoming a landlord does have its drawbacks
when you are living in the property as well. You'll need to weigh the positives
against the negatives in order to determine if this is a good fit for your
lifestyle. Keep in mind the fact that if it doesn't work out as well as you
would like it to, that you can sell a few years down the road when the property
value has increased and you have some equity into it.
The most obvious huge plus to owning and living in a multi-family first home
is the fact that your tenants are going to be helping to pay off your mortgage.
You can use the added income to save for future repairs or improvements or for
those months when one of your units is not rented out. As the owner you have
the flexibility to either require a lease or to rent out by the month. In
either case, you should secure a rental agreement form with your specific rules
spelled out to help avoid future misunderstandings with your tenants.
These days, screening potential tenants has become easier. You can choose to
do a complete background check with criminal, credit, and rental history or
any combination of those. You can require a damage deposit, first and last
months rent or a combination of those also. Many real estate and rental agencies
can perform those checks for you usually for a fee equal to one months rent.
Local and state landlord laws vary widely from area to area and should be
checked before committing to purchasing a multi-family property. Should you
need to evict a tenant for some reason, times can vary from 2-6 months
depending on how the process unfolds. Even with good screening practices,
there is always the possibility that it may be necessary at some time.
Another plus of owning a multi-family property is the fact that when things
go well, and you are able to save enough to finally purchase your dream home,
you may not want to sell your multi-family property and instead elect to keep
it and rent out your prior unit for even more added income. This might require
you to stay a little longer than you had planned on but, can increase your
net worth substantially.
A huge plus to owning a multi-family property is the ability to perform
minor repairs. When an item in a tenants apartment breaks, they will expect
it to be repaired as soon as possible. Some of the common repair items
that you'll encounter will be clogged toilets, leaky faucets, burned out
light switches or wall receptacles. You can save your self considerable
money by learning how to accomplish these types of minor repairs.
As you can see, there are pluses and negatives to owning a multi-family
home. You will need to alter your lifestyle to accomodate owning and residing
in one of these properties. If you treat and run this property as a business without any emotional
attachment, it can return increasing profits to you year after year. This
is still a lifestyle choice that some will be able to live with and some
won't.
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