We often are asked, does it make sense to sell your home to buy a duplex, triplex, fourplex?The answer is not the same for every homeowner, but it may be right for you. Why would a homeowner consider such a move you ask?
Here are some common reasons along with some notes to consider:
The homeowner is looking to offset the cost of a mortgage with supplemental rental income:
- There are options on the market where the other units can sometimes cover the mortgage payment entirely. When you sell a home to buy a 2-4 unit, your net mortgage payment can be about the cost of rent or less. Sometimes, you can live essentially payment free once you factor in the rental income.
The homeowner is looking to upsize to a larger home, but does not want the full financial burden of buying a larger home:
- There are 2-4 unit properties where there is a large main home with smaller supplemental units. Some properties are structured with multiple houses on one lot separated by fences. It appears to be separate properties when in fact they are the same parcel. In situations like this, it really essentially feels like you have a neighbor that happens to pay you rent. Ultimately, there are various options for a homeowner with this need.
The homeowner does not need as much space as they currently have (i.e. empty nesters) and are looking to downsize and concurrently generate cash flow:
- This is often a strategy that retirees are exploring and it makes perfect sense, especially if you have substantial equity in your current home. You can potentially purchase a 2-4 unit property with little or no loan and the rental income from the other unit(s) can be a huge supplemental income for your retirement lifestyle.
The homeowner has a need to house other family members or loved ones:
- Many homeowners have to assume the responsibility of caring for other loved ones. Sometimes, the best option is a home with a separate unit where they can live independently, but within reach in case they need anything. Often a single family home cannot accommodate this need.
Regardless if one of the 4 reasons above are similar to your reason to sell your home to buy a duplex, triplex, fourplex, or even if you have a different reason, there are often options out there that can accommodate your goals.
As mentioned above, each scenario is different and we consult on a case-by-case basis. We can often find solutions that can accommodate your housing needs as well as your investment goals in one duplex/triplex/fourplex property.
This is definitely a topic that can be discussed at length. If you’re entertaining this idea or would like to discuss some real world examples that may suit your needs, call us anytime to learn more!
To learn more about how you may sell your home to purchase a duplex, triplex, or fourplex,
Call (858) 449-1253 or email Lawrence@DuplexSanDiego.com