Is a multi-family home for you?

I believe it's important to discuss the pros and cons and the long-term financial strategy of owning a multi-family home.

I would like to explore with you, the option to purchase a two or three-family home to offset your costs.  Or if you're interested in building a real estate portfolio, a great place to start is with a multi-family residence that you also live in.

Prices for all types of homes in Westchester are going up and so are mortgage rates.  Now may be the best time for you to get into the market while prices are still affordable. 

Let's look at the math.  You purchase a single family home for $500,000. You put down 20% and get a mortgage for $400,000. In round numbers, every month your basic housing costs will be $2,000 for the mortgage, $1,200 for taxes, $100 for insurance, for a total monthly payment of approximately $3,300.

Or you purchase a two-family home for $500,000 +, but now you have rental income coming in every month at a very reasonable $1,200 per month.  Your monthly payment has dropped over 36% to $2,100 per month.

Obviously, when someone else is helping you to pay down your mortgage, your costs are lower and your residence is more affordable.

A common misconception is that multi-family homes are "too expensive" and "out of my league."  That's not necessarily true.  I can show you beautiful multi-family residences throughout Westchester with prices that are on par with single family homes.

Another stumbling block I often hear from clients is, "I don't want to be a landlord."  While I'm not going to deny that there can be tenant issues, if you properly and legally screen prospects, you can avoid many of those problems.  

My father and mother realized that the only way our family was going to get ahead was through owning a multi-family home.  Later, my parents held on to the multi-family and that income is what enabled us to move into a single family. I learned the lesson well and I also started with a multi-family, and when I sold it for a profit I was able to purchase a single family home. I continue to invest in multi-family properties to this day as an additional investment tool.

Michael J. Marciano, SRS, CDPE, CBR, ABR 

Keller Williams NY Realty

Real Estate Associate Broker NY & CT