Most often, the term “owner occupied investment property” is used to designate a multi-family dwelling that the owner also lives. This arrangement has some definite advantages, as well as some major drawbacks. Investors usually start small with a duplex or triplex to get the feel of this real estate investment strategy. And to further help you make the right decision, here are the pros and cons of an owner occupied investment property in Garner.
Pros of Owner Occupied Investment Property in Garner
FINANCING EASIER TO GET
From the point of view of banks and mortgage companies, multi-family properties with four or fewer units are more attractive than other kinds of investment properties (even more attractive than single-family properties). And if you live in it so that it is truly an owner occupied investment property in Garner, it will be easier to get financing. In fact, you may qualify for financing with a small (or no) down payment and better interest rates. Because the property is your primary residence, your lender will assume it will be well cared for and will likely grant you generous lending terms with favorable interest rates.
CAN PAY FOR ITSELF
Also, an owner occupied investment property in Garner, when one of the units is your primary residence, will pay for itself as your residence. In a sense, then, your own housing is free. If you’ve chosen in a good location and have full occupancy most of the time, the rent payments could potentially cover the entire payment mortgage payment. So it costs you nothing to live in your owner-occupied investment property while you get a return on your investment and it increases in value.
LESS HASSLE WITH PROPERTY MANAGEMENT
One of the biggest headaches of being a landlord becomes much more manageable with an owner occupied investment property inGarner. Because you spend much of your time on site, you’ll know exactly what’s going on with your property. For example, you’ll know right away whether tenants are trashing their units, and you can do something about it before it gets out of hand. So the usually burdensome task of property management gets a lot easier.
Cons of Owner Occupied Investment Property in Garner
TENANTS OFTEN SELF-LIMITING
The first drawback is that tenants are often self-limiting, and, as a result, vacancies may become a problem. Often, potential tenants are reluctant to live where the landlord lives on the other side of the living room wall. They may feel too stifled in such a situation and look elsewhere to rent. If this happens, you’ll likely have to be competitive on rent and offer some extras and amenities.
TOO AVAILABLE FOR TENANT COMPLAINTS
Another problem with owner-occupied investment property in Garner is that you as the landlord – the person who has to take care of problems and make repairs – will be too conveniently accessible. The upshot is that when you live on site, you often have to deal with many and frequent complaints. About the only thing you can do is set and enforce some strict rules concerning complaints and repair requests.
POSSIBLE CONFLICTS OF INTEREST
A final con is that there may arise conflicts of interest. If you live on site with your tenants, you may become close friends with some or all of them. And when a tenant you’ve gotten close to is late on paying rent several months running, you may find it difficult to be as harsh as you need to be as an investor and businessman. The tenant is now your friend, so your role as friend conflicts with your role as landlord.
Going in for an owner occupied investment property in Garner, especially one with only a few units, can be a great way to get started in the multi-family side of real estate investing. You do, however, need to be aware of and have strategies in place to deal with the cons we mentioned. Often, your best course is to enlist the aid of qualified real estate professionals, especially in finding properties in a good location that promise a solid return on investment.