Living at your investment property

[salejolie]

Talk to me about living next to/above/below your rental property. I'm considering buying a duplex next year and I would like to go into this with m eyes wide open. If you have an income suite or multi-family unit that you also live in, tell me how it's going, what you like, dislike, what you wish you knew. Thanks!

[scout8]

We own a two flat and live upstairs. We have rented out the first floor to tenants for the past several years. We also own another three flat that is all rented out now, but my H lived in it before he moved in with me.

I have not really had any issues at all. I keep the rent on the low side of the range so that I get good applicants. I always make sure to tell people that we live upstairs and keep pretty normal hours. If they work an odd schedule, they will need to be quiet after 10pm.

I guess I don't have much advice because I haven't had any problems. Our current tenant is great and I hope she never leaves.

Oh, and financially, it is very MM. The rent really offsets our monthly costs. We bought at the top of the market. If we bought now with the lower prices, the rent would come close to covering all of our costs.

[imojoebunny]

We own two, 2 family homes. DH and/or I have lived in all of them. We have good properties, in good neighborhoods, though not so good when we bought them, they are now in nicer places than we actually live (OK, so our house is nicer, but the neighborhoods are more desirable were our rentals are.) The rental market here is super tight right now, so we have our pick of tenant. We had an open house for 1 hour on a rainy Sunday and had 8 different sets of people fill out applications and pay the fee. We rent to the highest credit person or the first person who submits an application with stellar credit. We are not looking for problems. We are not slum lords, and we want people who want to be good neighbors to the neighbors of our homes, either ourselves, since we lived in them for 10+ years, or the neighbors in the homes nearby, which in one case, are $1M+ homes, and the other are around $500-$900K.

We have not had a lot of problems. We have owned these places for 13 and 20 years now. We have had the same tenant in one for 8 years, and others turn over about every 2-3 years generally, since we tend to rent to young professionals trying to save to buy houses, which is the demographic we are in. Like Scout8, we don't try to maximize rent, so much as minimize discord.

[scout8]

I thought of something else. When I have a good tenant, I rarely raise the rent. If I do, it is a small amount. I would rather keep my good tenant. Also, vacancies cost a lot of money. Not just the lost rent, but also the work needed in between tenants.

[salejolie]

Thanks everyone! Does the lender take into consideration the income from the rental when purchasing a multifamily home?

[salejolie]

Oct 6, 2015 20:51:02 GMT -5 scout8 said:

Oh, and financially, it is very MM. The rent really offsets our monthly costs. We bought at the top of the market. If we bought now with the lower prices, the rent would come close to covering all of our costs.

That's exactly why we need to do it. My husband will never have a traditional job, and I need the flexibility to take jobs that are less stressful or that I'm interested in without the pressure of a large mortgage every month.

Seems like the consensus is live upstairs, and get tenants with good credit.

[ursulabuffay]

Oct 7, 2015 10:35:49 GMT -5 salejolie said:

Thanks everyone! Does the lender take into consideration the income from the rental when purchasing a multifamily home?

They consider 75% of the rental income in the calculation.