Basics of Property Management: Screening Potential Tenants

3 Questions To Ask Before Investing In A Two-Family Home

18 May 2015

Jesse Obrien

The downside to living in a two-family home is that you will actually have to share walls with another family, and you may not have any say in who the other family is. If this is a problem for you, you could have control over this by purchasing the entire two-family house. You could live in one side and rent the other out to the family of your choice. This could be a good money-making investment for you, but here are three things to consider before you go through with it.

Are You Cut Out To Be A Landlord?

Two-family homes can be duplexes, townhouses, or other types of structures, and they are designed to offer two separate places to live. If you purchase the entire house, do you fully understand what your duties, rights, and obligations will be as a landlord? As a landlord, you will have to:

• Choose tenants
• Collect rent
• Make repairs and upgrades on the property
• Deal with problems as needed

In addition, you will have to pay a mortgage payment on both properties, instead of just one.

Could You Survive Without The Income?

Because you own both sides, your mortgage payment will be higher than if you had only purchased one side of the home. If you have trouble keeping the unit occupied, will you be able to pay the entire mortgage payment?

If you can purchase the two-home unit for a low price, you could make out really well if you can keep the unit rented at all times; however, there will always be transition periods when rent money is not coming in for a month or two. Before you buy it, make sure that this would not be a huge problem with your personal finances.

Will You Be Able To Get Financing?

Finally, you will need to determine if you would even qualify for financing on the deal. This will probably depend on your income and credit, but it will also depend on the appraised value of the property. The appraisal amount will be determined by the size, condition, and location of the unit.

If you can get approved for financing, you should also take some time to work out a budget simply to see if this investment would be worthwhile to you or not.

Buying an entire two-family house can be a great investment in many cases. If you can find one for a good price, this might turn out to be a great decision for your future. To learn more about two-family homes for sale, contact a real estate agent in your area or visit websites like http://www.primerealtygroupinc.com/.

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