The foreclosure crisis has caused many urban dwellers to reconsider the benefits of owning a single-family home. First, owning an owner occupied single-family home means that all expenses are on the mortgage holder. Typically, there is no income being produced from the ownership of an owner occupied single-family. Owning a two+ flat presents the opportunity to live in one unit and lease the other units, and essentially acquiring some form of income.
In addition, complaints I hear against multi-unit ownership is that tenants are difficult people to deal with; they are loud, rude, etc. My rebuttal is - you were once a tenant. You were a tenant at least once in your life. Growing up you were a tenant in your parents’ home. How did they manage you? Your parents laid out simple rules that should be followed. If they were not followed you were held accountable - same with tenants. With tenants, or as I like to call them “Clients”, there are clear well articulated guidelines in order to live at the residence. These guidelines should be clearly stated within the lease agreement and in a tenant handbook. For responsible people who rent, the eviction process poses a real threat to their lively hood, if there is any aberration from the rules. Evictions are public records that may record judgements and also cause wage garnishments. These actually will cause a tenant much difficulty when trying to rent from another responsible landlord. Which leads me to - Before you consider leasing to anyone, do a thorough background check, current residence inspection, eviction court filing check, etc.
With very simple and common sense business practices you will be able to provide a quality home for someone and in return be compensated for your professionalism and space. Also, owning a two+ flat, with todays pricing and interest rates, allows you to pay down your mortgage nearly twice as fast. Paying down your mortgage gives you an opportunity to build equity, allowing you to start a business, purchase more real estate, finance your education, or whatever endeavors you may have.
Finally, many first time homeowners are relatively new in their career paths with less money to put down as “down payments” and have less accumulated assets to show the bank or lender. FHA financing allows owner-occupied buyers the opportunity to buy up to 4 units for as little as 3.5% down, and up to a purchase price of $788,450 for a 4-unit building! Compare that to 20% or more with most conventional lending programs.
My point is - owning your first piece of property should be about creating wealth in the future as well as today. Otherwise, it becomes hard to quantify working everyday to pay for something that may or may not payoff in 15 or 30 years.
At Miro Development, LLC, we strive to bring the best amenities to our clients. We are licensed General Contractors and experienced investors. Gone are the days that 2+ flats feel like apartments. Many of our finished buildings "feel" like single-family homes.
For more information please contact Michael at 312.265.8385 or Michael@mirodevelopment.com for a walk-through and information about available properties.