You'll own multiple units in a building, which means you can rent them out and generate additional income, some of which can even cover your mortgage payments.
What is a multifamily home?
Upsides to owning a multifamily home The biggest advantage to buying a multifamily home is the immediate potential for income by renting out the units you’re not living in.
“The best reason to buy a multifamily home is to pursue financial freedom,” says Jason Reed, a real estate agent in Minnesota.
Other benefits can include tax breaks.
Disadvantages of owning a multifamily home If you're planning on paying your mortgage using your tenants' rent money, you have to make sure the units stay rented.
“Instead of having just one furnace and one set of major appliances, multifamily homes have several, creating more potential for major problems that need to be addressed.” Some multifamily homes come with tenants already living there.
That includes the potential rental income, utility costs of a multifamily home, and taxes you'll pay.
“When buying a multifamily property as a first-timer, it's important to know your limits," Reed says.
Would you be able to manage your [mortgage] payment with this considered?” Reed typically recommends that buyers start small when purchasing their first multifamily property.