Multi-family Homes: Issues with Loans and Properties
Multi-family homes are a great investment opportunity. Investors all over the world make thousands of dollars every month by renting out multi-family homes to tenants. And even though this can be a great way to make money, there are a few problems that you should be aware of from the beginning. By knowing what to look out for, and how to avoid these problems, you will be able to increase your chance of success when dealing with multi-family homes.
Multi-family homes come in a variety of different styles. The first problem that you may run into is choosing which kind of multi-family home is best for you. This can be difficult for people that are new to the industry. Your options are pretty much endless. Any piece of property that can house more than one family can be considered a multi-family home. This includes duplexes all the way up to 6-plexes and bigger. The best way to overcome this problem is by finding out what you can afford, and then moving on from there. In other words, if you want to invest in a multi-family home, but do not have a lot of cash, you may want to consider an inexpensive option such as a standard duplex. These are much less expensive than larger buildings that house several families.
Another problem that you may run into with multi-family homes that you have not thought of is the upkeep and repairs that you are responsible for. Remember, when you buy multi-family homes you are more than just the owner. You are also the landlord that is responsible for making any necessary repairs. And if tenants are paying rent, they will definitely be demanding when it come to repairs and updates to their unit.
Also, making your payment on your loan will be dependent upon your tenants paying you on time. This means that you will have to carefully screen the people that you rent to in order to ensure that they are trustworthy. In addition, you will also have to act as a collector if you do not get paid on time.
Buying multi-family homes may also be a problem for you if you do not have a good financial history. Often times, buying multi-family homes will mean that you have to take out a large loan. If you do not have good credit, and have missed payments in the past, you will have a hard time getting a multi-family home loan. In addition, in order to take out a large multi-family home loan many lenders require a down payment of a percentage of the buying price. This may be a problem if you do not have enough money in the bank.
When investing in multi-family homes, you will also need to make sure that you have enough money to cover your loan if your tenants do not pay. This goes along with being a good collector. But sometimes, regardless of how hard you try, you will not be able to get your money. This means that you will need to have enough money to cover your loan so that you are not late on your payment.
Multi-family homes make great investment opportunities. But before you get started, make sure that you are aware of the inherent draw backs that may occur.
|About the author:|
David gaIan has been in the real estate business for over 10 years. Beginning with a single rental he now buys houses for cash, can stop foreclosure, and provides information for commercial properties. David gaIan is the owner and operator of houseoption.com a website dedicated to helping homeowners facing foreclosure and other house related problems. You are free to publish this article unedited on your site as long as all links back to us remain in tact. We Buy Houses
e-mail: david_commercial at houseoption.com