Silly question on multi family calculations

6 Replies

I am overthinking this way too much... but I have an amazing calculation sheet.

With that said I am curious as to if I should run the numbers with 3 occupants or 4 occupants if I plan to live in one of the units.

Having a little brain freeze.

I feel like it’s not “fair” to the property if I don’t use 4 (charge myself rent) because it doesn’t give a good idea of what the property will produce after I move out in a year.... I may have just answered my own question.

Thanks in advance for any help.

@Jesse S. If it cash flows with 3 of the units occupied and you living in the fourth then it will definitely cash flow with all four rooms rented out The rent needs to cover your mortgage at a minimum if you are living there. Hope this helps.

Got it. So if I am coming in at 0... I am pretty much living for free. 


P.S. If anyone is interested in reviewing my overly complicated spreadsheet for input please send me your email address. 

I used to charge myself rent when I lived in my triplex. That being said you will also be doing things around the property I assume? I would figure it out both ways. 

What are your plans and goals?  

If you're going to live there forever, look at the 3 other units. Whatever you contribute as rent will not affect your net income/expense... essentially, if you charge yourself $1000/month rent, it increases your bottom line by exactly $1000: out one pocket and in the other. What I don't know is what the tax implications are if you charge yourself rent. If you're using an LLC to hold the property and you're paying into the LLC... May be worth looking in to. I've never lived at one of my rentals so haven't put much thought into that.

I'm assuming that you're not going to live there forever... in that case, I'd run numbers both directions.  You'll want to know what upside to expect when you move out, but you'll also want to know whether or not you'll have to contribute any money every month to keep afloat.  Maybe you end up living rent free, maybe you pay some rent.