Realistic numbers for a multifamily
Hey guys, i have decided to begin my real estate career by purchasing a 2 family home and i plan to live on one side(house hacking). I am looking for a house in the Brooklyn, NY area. I have a couple of concerns and i am hoping someone can help me out. For starters, me and my partner decided that even though we will have a multi-family, we are aiming to be able to afford all payments for the house(Mortgage, insurance, property taxes, utilities, etc.). As i look for houses online, it is becoming less and less likely that we will be able to achieve this for a whole year. Would that be ok since in theory i would be able to rent out one side anyway or should i continue to to follow my criteria. Also, if any real estate agents in the New York area are willing to work with first time investors please feel free to send me your contact information. Thank you
P.S. I can specify actual numbers if that would better help with your response.
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One thing you have to do in order to run accurate numbers is to find Fair market rent in the area for the other tenant and then add in a fair vacancy factor (5-8%). You cant run rental numbers on the fact of no rental income because then no one would buy a rental property ever.If you are worried about finding a tenant you can always increase your vacancy % or lower rent to under FMV, and if you are still worried about not getting a tenant in Brooklyn at under Fair market value then it is probably not a good idea to invest in this house. Find the fair rent then take into consideration everything you have plus Maintenance and capex usually 5% each of the total month rent. This should give you a more accurate number if it is worth buying or not to fit into your budget.
Greg