Hack Simultaneously Transforms Investors to Homeowners and Landlords | Think Realty | A Real Estate of Mind
InsightInvesting StrategiesNews Industry Trends

Hack Simultaneously Transforms Investors to Homeowners and Landlords

"Hack"

National statistics from the U.S. Census Bureau indicate home ownership rates at 63.7 percent as of April 2017 and rental vacancy rates at seven percent for the same time period.  National trends indicate rentals will remain a strong market for the next 10 years. Whether you’re a millennial who has been living at home or renting or just a tenant who hasn’t made the leap to homeownership yet, you may feel discouraged and assume you missed the opportune time to invest. Fortunately, there are plenty of options still available to the creative mind, and one particular hack is opening doors for investors all over the country. With interest rates still below five percent, you’ll want to quietly and quickly begin to explore and educate yourself on options.  Become an authority, research your area and your choices.  Weigh the benefits of becoming a landlord and homeowner with the same purchase.

Let me explain. I’m using Chicago, my hometown, as an example, but the concept will work anywhere that you can purchase a duplex. In the Chicago area, we have the popular “2 flat,” built in the early 1900’s as an affordable option for ownership. These buildings are basically duplexes, although they are often “stacked” with one unit on top of the other. After reviewing how the numbers work you may consider taking one step forward into the real estate investment game.  Dream big: maybe now is your time to leverage the smaller unit options to get into the game.

My oldest daughter jumped into this type of homeownership just this previous year.  After plenty of market research, she cautiously purchased her first home with a rental unit.  Her first stop was counseling with an experienced certified mortgage consultant. A good mortgage consultant provides real value when they assist you with structuring a purchase offer to match your needs.  A professional consultant should be aware of additional national and local down payment assistance programs that can be the razor’s edge that brings you into the game. They can educate you early on the funds needed and new first time owner occupied homebuyers are often pleasantly surprised on the options available for financing.

The next important step is the location of your home.  My daughter’s home is conveniently located blocks away from 2 local private colleges.  This provides her streams of potential prospects for new tenants and just as importantly provides her an exit strategy if she decides to move to another rental property and rinse and repeat the process.

Another millennial friend Laura, living just outside of the Fort Worth Texas area, purchased her first home in the second half of 2016.  (Fort Worth has been listed as one of the top ten US cities with the largest growth since 2015.) Laura was a master “house hacker” and she began renting out both the additional bedroom in the 2-bedroom home and the attached unit.  She has already purchased a second rental property.

Whether renting and inhabiting is the right strategy for you or not, the lesson remains the same: don’t be afraid to get creative with your real estate. The payoff can be huge!

 

Linda Liberatore is the founder and president of My Landlord Helper—Secure Pay One. Contact her at lindal@securepayone.com.