My family and I live in a multi family home that we purchased a few years ago. We live on the bottom floor and rent out the top floor for tenants. For us it was the most logical decision, as the rental income pays more than half of the monthly mortgage, and a home the size of the space we live in would have a mortgage significantly higher than what we pay every month after the rental payment comes in. There are other reasons as well why someone would choose to buy this type of house. Read on below.
What are they?
A multi-family home is a residential property that contains more than one housing unit. This can include duplexes, townhomes, or an apartment complex. When you choose to purchase a property in a multi-family unit, it becomes considered an owner-occupied property. A duplex is a two-story house in which two families live on each floor though they share one front door. A townhouse is one property that is separated by an interior wall. The units will be sold separately. An apartment complex is usually a single structure with five or more separate apartments like the apartments for rent in Wilmington. There will be common areas like garages or pools.
Who is it good for?
Despite its name, multi-family properties are not designed solely for families. It can cater to a wide range of people in different stages of their lives. Originally, it was built for young people with a little bit of disposable income. Though, in recent years older people have noticed the benefits of multi-family living such as the social aspects of the responsive onsite maintenance team. These buildings can provide a space to live in a good location without too much cost.
Should you live in a multi-family property?
One of the main reasons for living in a multi-family property is the earning potential that they offer when you no longer require to live there. The monthly rent from two or more tenants can always cover the mortgage and give you a little more spending money. There is also the added benefit of not having to directly manage the property there are often residential management services attached to these properties that can deal with maintenance and tenancy issues.
Though it needs to be noted that it is not always a benefit to buying a multi-family property. They are not easy to find and when you do, they are often more expensive than single-family homes. There is a potential for higher operating expenses and there are limited exit strategies. You need to think about how much management you are willing to take on.
Multi-family homes
This type of property is becoming more and more popular as it offers a different way of living and can often be cheaper for the tenants of the properties. If you are looking to buy one to live in, then the benefits you may see in years to come may convince you that this is the way to go.