Never been a fan of single family or condo's. Struggling to pay a mortgage every month in the hopes of a payout when I sell? Fuck that, that shit is for the birds. Like that dude from "Rich Dad, Poor Dad" said, if is not making you money right now, its a liability regardless of what it is. An owner occupied multi family is where the money is at.
Whatever portion of the property you don’t occupy is considered a business expense. For example, if you buy a 4 family, rent 3 units and occupied 1 unit, 75% of ALL your expenses are tax deductible. Once you add your depreciation expenses(Cost basis*75%/27.7 years) you are going to show a paper loss(You spent more on the property than you received in rent) on your taxes. You can take that “loss” and deduct it from you regular income (Passive activity loss rules). In other words, the money you receive in rent more than likely is going to be tax free.
This is almost idiot proof and is the way generations of Americans have accumulated their wealth. Nothing can go wrong unless you start fucking one of your tenants and she unilaterally decides she’ll let you eat her box in lieu of rent. Even during the great recession while RE prices took a hit, rent never went down in NYC. Just make sure that the numbers are there from the jump . I.e. the rent roll will cover your monthly nut. Your tenants will pay your mortgage and even living expenses for you and you can use the money you would otherwise have spent on housing to pay your mortgage off even faster, stack your money up, or blow it all once a year at "Classicos" in Sosua. Also, once you completed your renovations and screened the tenants, this business basically runs itself.
tenants tend to be on their best behavior when the landlord lives on site.
If you wanna make even more bread, have roommates on your apartment as well. You can give him a little discount on the rent and make him your bitch... snow clearing, light cleaning, separating the trash, dealing with the other tenants.You would be surprised what people would do for a cheap place to crash in a high cost city.
Whatever portion of the property you don’t occupy is considered a business expense. For example, if you buy a 4 family, rent 3 units and occupied 1 unit, 75% of ALL your expenses are tax deductible. Once you add your depreciation expenses(Cost basis*75%/27.7 years) you are going to show a paper loss(You spent more on the property than you received in rent) on your taxes. You can take that “loss” and deduct it from you regular income (Passive activity loss rules). In other words, the money you receive in rent more than likely is going to be tax free.
This is almost idiot proof and is the way generations of Americans have accumulated their wealth. Nothing can go wrong unless you start fucking one of your tenants and she unilaterally decides she’ll let you eat her box in lieu of rent. Even during the great recession while RE prices took a hit, rent never went down in NYC. Just make sure that the numbers are there from the jump . I.e. the rent roll will cover your monthly nut. Your tenants will pay your mortgage and even living expenses for you and you can use the money you would otherwise have spent on housing to pay your mortgage off even faster, stack your money up, or blow it all once a year at "Classicos" in Sosua. Also, once you completed your renovations and screened the tenants, this business basically runs itself.
tenants tend to be on their best behavior when the landlord lives on site.
If you wanna make even more bread, have roommates on your apartment as well. You can give him a little discount on the rent and make him your bitch... snow clearing, light cleaning, separating the trash, dealing with the other tenants.You would be surprised what people would do for a cheap place to crash in a high cost city.