How to Choose a Two Family Home

The type of real estate you choose, especially for a first-time buyer, can be a tough decision to make. Many people choose a two-family home, but for different reasons. Real estate is the most expensive item you will ever invest in, and, yes, it is an investment, as well as a place to live. A two-family home can help pay the mortgage for one thing. Having a tenant can give you someone to help with the work also. Yes, having a tenant can also be a problem, but you have to evaluate your own situation and decide if there are more pluses than minuses.

Difficulty: Moderate

Instructions

Things You'll Need:

• Real desire to be a home owner.
• The ability to deal with people. A landlord has to be part diplomat and part tough guy. It is not easy to evict someone.

1. Figure out your budget. This is the first thing to do when buying any real estate. If one-family homes where you are looking would stretch the budget to the breaking point, then consider a two-family home. But get all the pluses and minuses, pros and cons first.

2. Check out what apartments are renting for in the area before you begin to look. If the expected rent will give you enough income to qualify for a mortgage, then you should begin your real-estate search.

3. Make a list of the pros. You will have help with the mortgage. Chances are, you intend to buy a one-family home in the not-too-distant future. Then, you will have the option of renting out your apartment and be able to report even more income. In most cases, you will be able to afford a two-family home in an area where a good one-family will be out of reach.

4. Make a list of the cons. You cannot count on an apartment to be rented 100 percent of the time. Take this into consideration when you add the rent on to your income. Not all tenants are ones you want to live with. If the rental unit is occupied, and the tenant has been there for a good period of time, it is a big plus. You will have to be on call to take care of repairs. Being a landlord is like having a second job.

5. Talk to a real-estate professional who is familiar with the area. Go in with all your facts and figures. Chances are, you will have to compromise on something. But if owning real estate is more desirable than continuing to be a renter yourself, then making compromises will not be that hard.

Tips & Warnings

• Make your decision using your head, not your heart.
• Buying a two-family home is like buying a business. Approach it like that.

[PattyOh]

on 3/9/2008 Great info for someone considering this purchase