Enter To Hot Market Could Be A Duplex
Tired of being priced out of the market? Perhaps the answer is to buy an income producing property that you can live in, such as a duplex or triplex. The rental income could help pay your mortgage and enable you to qualify to buy a more expensive property.
Ideally, your wealth building strategy might go something like this: You move into the property and own it long enough to accumulate equity through appreciation. Then you sell. You use the proceeds earned from the portion of the building that you occupied as a down payment on a single family home.
You exchange the proceeds from the rental portion of the property into a larger rental that will have more upside potential thereby avoiding capital gains tax. This can be a 1031 Exchange.
Check the local landlord-tenant laws. Some communities like Santa Monica have rent control ordinances. In such municipalities you may not be able to raise rents to market rates. Base your projections on actual and allowable, not inflated rents.
Find out the strength of the local market. The rental market, like housing market, fluctuates over the time. The most successful rental properties are often located near shopping, transportation and good schools.
Finally, carefully consider whether you can handle being a landlord who will live close to the tenants
Tired of being priced out of the market? Perhaps the answer is to buy an income producing property that you can live in, such as a duplex or triplex. The rental income could help pay your mortgage and enable you to qualify to buy a more expensive property.
Ideally, your wealth building strategy might go something like this: You move into the property and own it long enough to accumulate equity through appreciation. Then you sell. You use the proceeds earned from the portion of the building that you occupied as a down payment on a single family home.
You exchange the proceeds from the rental portion of the property into a larger rental that will have more upside potential thereby avoiding capital gains tax. This can be a 1031 Exchange.
Check the local landlord-tenant laws. Some communities like Santa Monica have rent control ordinances. In such municipalities you may not be able to raise rents to market rates. Base your projections on actual and allowable, not inflated rents.
Find out the strength of the local market. The rental market, like housing market, fluctuates over the time. The most successful rental properties are often located near shopping, transportation and good schools.
Finally, carefully consider whether you can handle being a landlord who will live close to the tenants
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
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