Income Real Estate: Option #3 the Living for Free Plan, Move into a Triplex and have Your Mortgage Paid by Tenants

Real estate investment specialist have long recognized that by focusing on a small niche it’s much easier to evaluate an opportunity.  This series will gradually expose you to a variety of niche options for investing in real estate.

Living for Free Plan

2707 Priscilla – A triplex in Britannia

Now here is a real estate investment strategy that is not for the faint of heart.  Buy a triplex, move into one of the units and let the tenants (your new neighbors) pay your mortgage.

I call it the Living for Free Plan!
But…Be Warned, the Living for Free Plan has a high emotional cost and a higher upfront cost that traditional living arrangements.
Let’s start by examining the upfront cost and benefits.
This strategy is an excellent choice for your first foray into real estate investment;
  • it allows you to keep your investment (very) close giving you security and regular contact with the building and your tenants.
  • the right property could pay a high percentage if not all of your mortgage.
  • you will need a higher down payment, upwards of 25%
  • most banks will only consider 50% of rental income when calculating how much mortgage you qualify for.  (eg. if you qualify for a home up to $370K based on your income, typically an increase of $1,000 a month income would increase the home you could afford to $450K, but if you found a property that makes $1,000 a month the bank would only qualify you up to $410K)
The Drawbacks;
  • Managing a real estate investment, especially one your are living is like a second job…a job that never leaves.
  • Hiring a property management company can ease the pressure of emergencies and rent collection but adds cost & reduced your profit.
  • even still if the tenants know you own the property they are likely to come to you anyways.
  • a missed rent payment could cost you big time so you need to maintain a reserve fund
If you want to consider your investment options or just chat about what you need to do to prepare to sell a property ask them below, or contact us directly at 613-788-2113
Hope this helps you understand real estate a little better.

Income Real Estate: Option #3 the Living for Free Plan, Move into a Triplex and have Your Mortgage Paid by Tenants by Dave Williams

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