Many new to real estate investing as well as first time home buyers choose duplexes, triplexes or even a fourplex as their initial buy. This can come with both pros and cons.
Let’s take a look at a few of them…
1. It can pay for itself
Even by buying a duplex as your first real estate investing move while living in one side can be incredibly powerful. With the right property and rental market the rent from the other unit can cover the entire mortgage payment allowing you to live payment free while the property is paid off for you.
2. Easier Financing
1-4 unit owner occupied properties can be much easier and more attractive to finance than even single family homes which are purely to be used as investment properties. It can mean less down payment or even 100% financing and better interest rates, as well as easier qualifying for income.
3. Easy Property Management
You’ll never be stuck guessing about what is going on with your real estate investing holdings. You’ll be right next door, conveniently positioned to collect rent and make sure your property is being taken care of.
1. Tenant Complaints
At the same time being so close to your tenants makes it far easier for them to complain at any time of the day or night, which can actually increase your repair and maintenance costs, not to mention being a huge pain.
2. Limited Prospective Renters
Many potential renters aren’t going to want to live somewhere which has the landlord living on site. They want freedom; want to make noise or plan on being late with the rent every now and again.
3. Conflicts of Interest
Even if you get great tenants it can be a problem. Building close personal relationships with your renters can make it difficult to be objective about your real estate investing and make purely business based decisions.