Owner-occupied investment properties are helping buyers all over the country finance their deals. It can be a great way to start real estate investment as the upfront costs can be relatively low. Learn more about the pros and cons in our latest post!
It’s not a new strategy, yet many investors just starting out fail to take advantage of owner-occupied investment properties. While living in a multi-family init may not be your first choice, the rewards can be huge. Below we offer a few pros and cons to consider when buying owner-occupied investment properties in Lorain!
Live For Free
When you purchase a multi-family property and occupy one of the units or opt to buy a house, renting out the bedrooms to other roommates, you will, in essence, be able to have other people pay off your mortgage for you. You will be able to purchase an investment property as well as a residence for yourself, all while collecting an income each month. In many cases, not only your mortgage be taken care of, but your utilities, taxes, insurance, and other living costs will be covered too! Using this strategy will allow you to save up money, preparing you for when you decide to move out!
Low Down Payment
You can use an FHA loan to finance the purchase a single-family home or a multi-family property with up to 4 units. Your credit doesn’t have to be perfect, nor do you need a large down payment. In most cases, you will only need 3.5% down. An FHA loan will require you to live on the home, but only for 12 months after the property closes.
Easier To Chase Down Rent
Hopefully, you will have high-quality tenants who always pay their rent on time. However, when you live on site, it will be much easier to chase down your rent if you need to. You’ll know when people are at home. You will be able to walk a few feet and knock on their front door. Or maybe you just have to yell down the hall if you’re in a single-family home.
You Are Easily Accessible
Living in a multi-family property or in a house with other roommates will have a severe impact on your level of privacy. This becomes even more on an issue when you are the landlord. You may get stuck with a tenant in another unit who knocks on your door at all hours of the night with complaints. You’ll likely find yourself having conversations struck up with you whenever you leave your apartment, which can grow a little tiresome.
You’ll Share Walls
It’s one thing to share walls with someone you may not have to deal with all the time. The occasional noise or loud TV won’t be such an issue. But if you are in close quarters, with people who are paying you to live there, the situations can become a bit tenser and involved. Or you may have a fight with a roommate, but find yourself unable to evict them due to your lease agreement.
Overall, the cons of purchasing owner-occupied investment property don’t compare to the potential benefits you can receive. You will only have to commit to living in the house for 12 months, which when you consider the perks, isn’t much time at all. When you find the right tenants or roommates, the situation can become even sweeter. If you like living there, you may not want to ever move out of the house!