Having an owner occupied multi-family investment home can be an excellent way to create an income stream. However, living in a building you own and manage isn’t always easy! Here are a few tips to help you make money and keep your sanity while living in a building you also rent out!
Acquiring your property.
Beware. Initial financing to purchase a multi-family building ban be more difficult. That is unless you live there too! For example: You can use an FHA loan to purchase a multi-family building so long as you move in right away and stay there for at least a year. You can also use your anticipated rental income to qualify for a loan.
When you own an owner occupied multi-family investment property, you can rent out the other units, using that income to pay off your loan. In theory, the property will pay for itself!
Regulations can change all the time, so make sure you are up to date on the requirements! Chicago Home Buyers can help to answer any questions you have!
If these walls could talk. Oh wait, they can, and they’re complaining.
Make sure you are going to be comfortable sharing a wall with your tenants. Living in the building allows you to easily tend to problems, however, it also allows you to easily tend to problems. 😉
Tenants may not be respectful of your time, and could potentially come knocking at your door at 11 o’clock at night with a relatively small issue. Make sure “business” hours are well-known and posted and reserve a special after-hours number for emergencies. On the upside, living in the same building with your tenants will most likely encourage them to be more respectful of the property. You are less likely to have noise complaints if the residents know you are right there on site.
Provide a sense of community.
Just because you are renting, doesn’t mean you don’t want to feel like you are at home. Encourage the neighbors to get to know one another and be on friendly terms. This makes communication better for everyone and will help to decrease turnover. People don’t usually move away from somewhere they love.
Bring tenants together through BBQ’s or holiday gift exchanges. Don’t pressure people, but leave the invites open!
Don’t let it go to your head.
Don’t attempt to micro-manage people or get upset if you hear someone coming in late. You are not the local sheriff or the hall monitor. Your tenants are paying good money to feel at home and be comfortable. Nobody should have to walk on eggshells because you are living in the building. You will need to be objective at times and pick your battles.
Unless people are blatantly disrespectful, you will need to keep a level head and not get offended my minor inconveniences of close quarters. In addition, forming friendships or relationships with tenants can turn into a conflict of interest when it comes to tenant-landlord issues or issues with other tenants.