We have got a great investment idea for you that will allow you to have financial freedom. Are you ready?
You should get an FHA loan to buy a multi-family house.
Wait a minute… before you start throwing in statements that you have heard from your friends or read on the internet, we would like to tell you that a multi-family house presents you with long-term financial ease. Over the next 20 years or more, you can save enough money to do whatever you want and still reap the benefits while living in a multi-family housing unit.
So, are you ready to know what benefits this investment offers? Let’s start:
Potential for Income
The only rule of applying for an FHA loan for a multi-family house is that you have to live in one of the units. This leaves all the units empty and available for rent. Now that you have bought the house, you can rent out the units and your mortgage will be paid by your tenants. Isn’t that amazing? If bad luck strikes and you lose your job, you don’t have to worry about being unemployed. The money from the rent will keep you afloat for a long time, until you find another job.
The only unit you have to worry about is yours. For the rest, you can write off the expenses including upgrades, maintenance and mortgage. You can then take the asset’s depreciation on the taxes.
Low Down Payment
By purchasing a multi-family house that has 4 units, you can get an FHA loan at a lower down payment. As compared to buying a single-family house, you will have to pay much more. The cost of maintenance, upgrades and mortgage will go out of your pocket and if you miss any of the monthly payments, you might get a fine.
Easier to Manage
As long as you occupy space in the house, you don’t have to worry about staying in the unit. This probably means that you won’t be available on site for your tenants, most of the time. By hiring an on-site manager, you can get help with taking care of the day-to-day problems. The manager will take care of the maintenance issues and you can depend on them to deal with the contractors.
One of the greatest benefits that you will get is that the price for maintaining the units will be much lower than compared to a single family home. From painting to plumbing repairs, everything will be done under one roof. The same falls for when marketing the multi-family house and insurance expenses.
This is why owning a multi-family house makes so much sense. The cash flow is good and you get a second source of income that easily. If your first real estate buy goes smoothly and you are able to build equity, then you can make this your profession. By now, you will be more familiar with the on goings, which will give you the benefit of making a better deal next time.