Right out of college, a good friend of mine made one of the best decisions he could. He saved up all his money, and applied his sterling credit rating to get a low-interest first-time home-owner’s mortgage. The property he choose though, was the smart part of this effort: he choose a multi-unit building.
The large brownstone in Charlotte wasn’t in the best area of town, nor was it in sparkling condition. He rented out the two larger apartments to tenants, putting himself and his girlfriend in a smaller downstairs apartment. It wasn’t the most ideal living conditions, and some people would have choose a different path.
The whole deal worked out great for my friend, simply because his mortgage was completely paid for by his tenants. In fact, they paid MORE then the mortgage, and he had enough left over to sock away in the bank, or make necessary and cosmetic upgrades to the building. Since he didn’t have to add any money out of his pocket to the mortgage, he was able to some months pay MORE on the mortgage, or some months to drop a nice chunk of change in the bank.
Flash forward a few years, and my buddy has moved to a beautiful and spacious home in a gorgeous part of town. He still owns his first multi-unit, and it is humming along nicely generating a little extra cash and paying for itself. It’s a great investment, and a wise one.
My point to this story is that multi-unit residential spaces may sound a bit cumbersome. More tenants, more headaches…More units...more costs…But in the end, if a sensible person is handling the property (whether it be you or a property management company) a multi-unit residential property can become a very lucrative and fruitful endeavor.
Kuester Property Management