Buyers invest in multi-family properties to generate residual income. The properties often include duplexes and triplexes that provide great investment options for first-time buyers. Investing in the properties helps the buyer maximize their profits and pay their mortgage payments. Discussing these options with a lender helps the buyer find a mortgage that meets their needs.
Reviewing a Mortgage for an Investment Property
Reviewing mortgages for an investment property helps the buyer find the best deal for them. A multiple-family home can present the buyer with at least one unit for them to live while they rent out the remaining units. If they live in the property, the buyer would qualify for an FHA loan. If they are a service member or a vet, the buyer could use a VA mortgage to finance the property. Conventional loans are also an option.
Does the Property Require Renovations?
If the property needs renovations, the borrower could acquire an FHA mortgage with renovation allowance. The mortgage helps the borrower finance the home and gives them enough funds to complete all renovations for the property and maximize their profits. Staying in the property while renovating the units saves the buyer some money and gives them immediate access to the project. Renovations can improve the buyer’s prospects and make the property more appealing to tenants. To learn more about FHA options, borrowers can contact Dustin Dimisa on Twitter now.
How Much Residual Income Will You Earn?
Conducting research for the property and the location helps the buyer find a more profitable property. The seller can provide details about how much they’ve earned by renting out the units. Buyers can review this information and research what features are more appealing for their target audience. Adding features that tenants want the most could increase the earning potential for the property.
What to Consider When Becoming a Landlord
When buying a multiple family property, the property owner is making the decision to become landlord. Becoming a landlord could present the new owner with many liabilities including personal injury claims. The property insurance will not cover all potential accidents that could happen on the property. In addition to homeowner’s insurance, the buyer will need to purchase landlord’s insurance. The coverage protects more comprehensive coverage for accidents and mishaps that were the property owner’s fault.
It is a great idea to get all tenants to purchase renter’s insurance to cover their own personal belongings. The renter’s insurance covers any damage caused by the tenant, their children, or their pets. The policy won’t cover any structural damage caused by the events covered by the homeowner’s insurance. The property owner can add a clause for renter’s insurance in the rental lease.
Buyers can use a variety of mortgages to finance a multiple family property. The investment offers residual income for the buyer and a home. Living in the property while renovating it gives the buyer a chance to qualify for an FHA with renovation allowance. Buyers can learn more about investing in a multiple family home by contacting their lender today.