The Pros and Cons of Being a Multiplex Building Owner-Occupant

The Pros and Cons of Being a Multiplex Building Owner-Occupant

There are advantages and disadvantages to living in a residential building you own. Here’s everything you need to know!

An owner-occupant is a person who owns a small multiple dwelling building, from two to five units (duplex, triplex, quadruplex and 5-plex), and who lives in one of them. Buying such a property requires strong managerial skills. It is also a considerable investment. Therefore, before deciding to embark on such a venture, do your homework and take sufficient time to weigh its benefits and drawbacks.

Additionally, it’s imperative that you ask yourself if you wish to live in one of your new building’s apartments alongside your tenants as there are both positive and negative aspects to doing so that must be carefully considered. 

A Lower Downpayment

Of course, you need to have amassed enough money for the downpayment when you buy a multiplex building. But interestingly, if you decide to become an owner-occupant, the downpayment required when purchasing a multiplex residence can be lower than for a single-family home.

In fact, people who acquire an income property only to rent and not to live in will generally have to provide a larger downpayment.

Help Paying the Mortgage

The financial advantage of being an owner-occupant becomes apparent once you have disbursed the downpayment and found tenants for all your units. Your tenants will help you pay off your mortgage, and since you will also be living in the building, this includes your own dwelling. Being a fellow resident is therefore an excellent way to generate a faster return on your investment.

A Great Way to Start Off in Real Estate

Are you new to real estate? Ideally, you should purchase a duplex or triplex. A smaller building will allow you to earn the money you need to become a property owner while not having to manage too many tenants. Furthermore, owner-occupants are entitled to certain tax-deductible expenses, which can make all the difference!

The Risk of Being Pestered in Your Own Home

The more units the building you wish to buy contains, the more tenants you will obviously have to deal with and the greater the chances that you may be disturbed at all hours of the day and night. Being a landlord means that you must be available at any time to fix issues, such as clogged toilets, noise complaints, snow removal, faulty equipment.

If you’re the type of person that needs peace and quiet, and is anxiety prone, yet nevertheless really wants to be a multiplex owner, it would be best that you not live on-site. Your tenants can still call you, but they won’t knock on your door every time they have a question or a minor problem with their apartment.

To Bear in Mind

Don’t forget that a landlord has more expenses than a tenant. You are responsible for paying the municipal and school taxes as well as completing repairs and covering the costs. You will equally have to make sure the common areas are kept clean and carry out maintenance work.

As you can see, becoming the owner-occupant of a multiplex building can prove to be a sound investment. Before you decide to go ahead, though, crunch the numbers and be certain your endeavour will be profitable. Above all, you need to think carefully about whether or not this type of cohabitation is likely to adversely affect your quality of life. After all, your happiness is worth much more than any potential profit!

RE/MAX Québec

By RE/MAX Québec

By RE/MAX Québec

A leader in the real estate industry since 1982, the RE/MAX network brings together the most efficient brokers.