Now here is a real estate investment strategy that is not for the faint of heart. Buy a triplex, move into one of the units and let the tenants (your new neighbors) pay your mortgage.
- it allows you to keep your investment (very) close giving you security and regular contact with the building and your tenants.
- the right property could pay a high percentage if not all of your mortgage.
- you will need a higher down payment, upwards of 25%
- most banks will only consider 50% of rental income when calculating how much mortgage you qualify for. (eg. if you qualify for a home up to $370K based on your income, typically an increase of $1,000 a month income would increase the home you could afford to $450K, but if you found a property that makes $1,000 a month the bank would only qualify you up to $410K)
- Managing a real estate investment, especially one your are living is like a second job…a job that never leaves.
- Hiring a property management company can ease the pressure of emergencies and rent collection but adds cost & reduced your profit.
- even still if the tenants know you own the property they are likely to come to you anyways.
- a missed rent payment could cost you big time so you need to maintain a reserve fund
Income Real Estate: Option #3 the Living for Free Plan, Move into a Triplex and have Your Mortgage Paid by Tenants by Dave Williams