About 6 months ago, I met a couple who were looking to buy their first home. They are a young couple, with an adorable baby. They were really specific about what they wanted. She worked in Massachusetts. He worked in Cranston. They decided that Pawtucket would be the perfect location, right in the middle. They wanted a multi-family. With three apartments. And three bedrooms in each apartment. I set them up with my lender, and their budget wasn’t very high. But, because they had worked hard, and had saved a down payment, they were able to count the potential rental income toward their current income. And they qualified for a larger loan. My lender also had them apply for the MCC tax credit program. (For more info on this program, click here.) This means that they will save up to $2000 on their federal income taxes for as long as they own that house. That’s a huge savings of $166 per month!
Now came the fun part, house shopping. We looked at quite a few properties until we found just the right one. Good location, easy highway access. Well maintained property, with three apartments. There was even a coin operated washer and dryer in the basement for additional income. So, I negotiated with the listing agent, and made sure that the first floor would be vacant by closing. I also negotiated for the washer and dryer to remain. The property was inspected, and a few repairs were required. The seller agreed to that too.
Here’s how the numbers worked out. This is how they are able to live rent free. The rents on the second and third floors were each $800. Their mortgage, taxes and insurance monthly payment worked out to $1565. Add to that the laundry income, and the additional tax savings, and they are well on their way to becoming financially independent. After closing, they were so excited they were practically skipping on their way out the door. Imagine not having to worry about making your next rent or mortgage payment. It made my day. Seriously, this is why I do what I do.
As their agent, I didn’t care what house they bought, because I’m not going to live there with them. I cared about them making a good investment. And that they did. They were already talking about their next real estate investment. And this is a young couple, that both work hard at very average jobs. So if they can do it, so can you.
Now, I understand being a landlord isn’t for everyone. There are headaches along the way. Difficult tenants, repairs, vacancies, evictions. But, if having your tenants pay your mortgage sounds good, it might be worth considering.
You can click here and I will send you a list of all available multi family properties in Ken County. If you want other areas, just call, text or email me and I will set it up.