Multi-Unit Property: Is the Investment Worth it?
If you’re in the process of looking for a new home, you may want to consider investing in a multi-unit property. These types of homes have increased in popularity recently, as more and more people are leaning towards alternative living arrangements. The additional unit can be used for multi-generational living arrangements, as well as for renting out and running a home business out of. Here are some of the benefits to investing in a multi-unit property.
Mother-in-law units are in hot demand right now for renters. Many people find these types of units more appealing than renting an apartment in large complex or a room in a home. A mother-in-law unit provides privacy and the allure of having your own place that’s not directly attached to neighboring homes. There’s certainly no shortage of people looking for a place to rent. By having an additional unit on your property, you are guaranteed a stable income. Southern California is notorious for sky high apartment rentals and prices are only expected to rise.
According to RIS Media, fully permitted units are often priced about 60 percent higher than single dwelling homes. These homes typically sell very quickly and for a high price. The New York Times also reported that 15 percent of buyers will pay more for a house with an accessory dwelling. This provides space for peace of mind when investing in a multi-unit property because you can always turn around and sell your property for a hefty price tag.
Though some of your revenue from renting will be deducted for tax purposes, you can balance it out by claiming your expenses. These include any costs for repairs, maintenance, insurance, supplies and travel. Read up on the top 10 tax deductions for landlords here.
Is a multi-unit investment right for me?
Before you decide to invest in a multi-unit property, it’s important to consider if the decision is in line with your budget and lifestyle. From a financial standpoint, you will have to consider if you can afford such a property. Though your investment should pay off in the future, the initial financial burden may be too heavy for you currently. Furthermore, the process of finding a home with an additional unit may take longer so you will want to make sure it fits with your time frame. If you decide that everything makes sense financially, you then have to decide if you’re ready to be a landlord. Managing tenants takes a lot of responsibility and problems can arise if you do not make sure all your T’s are crossed.
Every city has different rental laws and city requirements. Before you rent out your space, check with your city’s planning and zoning office to make sure you’re renting out the space legally. Lastly, you also need to check the municipality rental housing codes for your city. For Long Beach’s zoning ordinances, click here.
Interested in buying a multi-unit property? Call us today and we would be happy to help you find a home that suits your needs.
*Information for this article was obtained from a recent report by RIS Media