Multi-Family Homes: House & Income
The dream of home ownership is generally having a single family home all of your own. However, if you’re open to non-traditional approaches to housing and home ownership, there may be some really strong financial opportunity. I like the idea of multifamily units. The idea of a duplex, triplex, or fourplex – which are eligible for the same kind of financing (the same that a single family home is). They have great income potential. If you’re an individual, a young couple, or perhaps divorced; or just not tied to that traditional image of home ownership.
How it Works
The idea behind buying a multi-unit property allows you to live in one unit and then rent out the other unit (or units) for income. It may feel a little bit like an apartment at times but as the owner you have a little bit of authority and you can pick your neighbors. Of course, you want to pick neighbors and tenants cautiously. But over the long run, you will be:
~Building a greater asset – because it will have more value in that it is housing for multiple families.
~Rent out your unit when/if you decide you want to buy a single family home. This will simply add to your income.
The Benefits to You The smart thing to do, in my opinion, is don’t sell it. This is a retirement plan – right here. Here’s what you’ve got:
~Appreciating asset – a great asset, inflation adjusted, that grows in value for the life of the property.
~Long term income into your retirement
If I were starting over now, I think my first home would be a fourplex and I would stay there as long as I could. I would still own it and would never sell it. In fact, if I could handle it, I would have bought a second fourplex and live there as long as I could stand it. Then I’ve got enough money probably to retire with a nice income. If you’re open to something a little nontraditional you’d look back and feel like a genius 20 years from now. You’d also have a nice retirement income and be able to enjoy life. You might, after the single family home, realize you don’t need all that space. The kids are grown and gone; you’d like to travel so you move back into one of the units. You can still rent out the other units. Your there part time and out traveling the rest, enjoying your lifestyle all funded (partly) by the smart choice you made years ago. It isn’t all that dramatic and exciting. And it may feel like apartment living at times. But for the long term sometimes these practical choices are just so financially prudent. If you’re open to something a little less obvious – it might be something worth considering.