What a great way to start getting into the income property/rental game and get ahead. When you invest in homes with basement apartments it is much easier to pay down your mortgage quickly and start to build equity, without the inconvenience of having too many tenants. In addition, with the way house prices have been rising it has become increasingly difficult for buyers to get into some of the areas they prefer. Well, a great way to be able to do this is with a basement apartments or duplexes and the number one thing you always hear from the experts when investing in Real Estate is “Location, Location, Location.”
Duplexes are legal two unit dwellings. Sometimes you have duplexes where the house is split vertically in two rather than having an apartment in the basement. The advantages to a duplex of this kind would be higher rental income because the unit is larger and not just in a basement. You will be able to pay down your mortgage much sooner. The disadvantage would be that you would have less living space. Therefore, your decision will be about whether or not you want more rental income and less living space or more living space and slightly less income.
Some things you have to look into or understand for both basement apartments and duplexes are the legality of zoning and whether the unit is up to fire code or “retrofit status” as it is commonly referred to in the industry. If you are going to buy one that is not legal or not up to fire code (retrofit status), be aware of complications that could arise..
It’s a lot easier than you think! Find out exactly how much liquid cash you have, talk to a mortgage specialist or a broker (make sure they have lots of experience with these types of properties) and get pre-approved. Give us a call, I will sit down with you and take you through this process in much more detail. We will review properties on the market and comparable properties that have sold recently to make sure you understand market value. We will review the income and expenses to make sure it’s a comfortable situation for you, taking into account savings for maintenance and vacancy and bad debt (savings for, If you ever have a vacant unit) Before you know it, you will own your first property with rental income and be on your way to reaching your financial goals! I am excited to work with you!