Buying or Selling a Home/Buying a triplex

Advertisement

Expert: - 4/4/2009


Question
I currently rent a bedroom in a gorgeous house shared by four people. My
lease is up in December. I want to take advantage of the $8000 tax credit, but
me and my boyfriend can't make mortgage payments until he gets a better
job (in the works). I was thinking about buying a triplex (good condition,
already occupied with happy tenants that want to stay) for $169,000. That is
very affordable and its in a decent area. The apartments rent for a total of
$1900 dollars. I was thinking of purchasing the property and collecting rent
and saving the extra income for a future home purchase and living with my
boyfriend in his apartment after December. I was told I need to have renters
insurance first to get insurance on the triplex. The yearly taxes are $1468. Do
you think this would be a wise investment?

Answer
Hi Kristin,

Congratulations on wishing to be a property owner. You need to take a few steps back and do your homework before you  dive into the world of income property.  There are a number of items you should really look at... You mention that you cant make the payments (just yet) not a good position if you own an income property... you have to assume down time and unit where you won't have any money coming in and yet the property will still need to have upkeep and a mortgage paid.

Contact a good reliable mortgage lender in your area, go through them with the loan types available and if you qualify, then crunch the numbers hard, don't assume a rosy picture, figure it to the worst case and see if you can make the property payments, if not take this time to grow your reserves account, and keep an eye on the market.

The $8,000 tax benefit in the long run is small compared to possibly putting in $8,000 for a downpayment and additional $10,000 in closing costs, of your hard earned money only to loose it in foreclosure.. . keep your eye on the big picture always...

When the time is right and you are in a position to purchase an income property ... great gain can be made... if not  ... great losses can be had... get your team (lender, realtor, financial advisor) lined up and start researching the market...

good luck

Buying or Selling a Home

All Answers

Answers by Expert:

Ask Experts

Volunteer

Connie Wildasinn-Broker,GRI,RealtorŪ

Expertise

Broker,GRI,RealtorŪ, Investor since 1979. Buying or Selling Residential and Income/Investment Properties, How to understand the process, how to negotiate through the transaction, What to Look for - But more importantly 'What to lookout for!', How to tell if the time is right - or hold on and wait. Why not to listen to your friends and even your family members, Who really has your best interest at heart?. Understand why any market is a good market and how to spot a good investment for you! If you are looking in California.. check out my website www.MetroCalBrokers.com and if you need assistance in a neighborhood I don't service, I will locate a local agent to that area who actually knows their profession and can assist you in your needs!

Experience

4th generation Realtor in the real estate business, I have helped for over 2 decades clients buy and sell, I am the owner of a local brokerage in the Los Angeles /Long Beach area, and have been a top producing agent in the area since I became licensed. Working through a deal is different to every client, no two people or deals are exactly the same. Knowing how to bring professional advise to the table with clear and concise understanding of real estate world. I can help you handle your buying, selling and investing, managing a 1031 Exchange, working with Equity Sales, Probate, Pre-Foreclosure Regular and Short Sales there is little that I have not seen come across my desk over the decades!

Organizations
NAR, CAR, WCR, ABR, e-Pro, GRI, BKBIA, CHNA,SSG

Publications
Broker Agent Magazine Long Beach Business Journal Long Beach Press Telegram Signal Hill Tribune Grunion Gazette All Experts Zillow - Lead Agent - Advise Expert Truila - Advise Expert

Education/Credentials
Broker-owner, RealtorŪ, GRI,e-Pro, SSG-Short Sale Certified

Awards and Honors
Managing Broker for MetroCal Brokers. We merged my old brokerage with MetroCal this year, and we look forward to expansion and growth moving forward. We currently employ 30 Realtors and growing. 15 years running top selling agent in Long Beach, South Bay area California. Top Producer 5 years straight Re/Max, C21, Realtyworld.

Past/Present Clients
upon request = or check out our website www.MetroCalBrokers.com and check the Testimonials section!

©2012 About.com, a part of The New York Times Company. All rights reserved.