Purchasing a multifamily home and renting it out to family

[Gervin Mujo Jr]

Will there be issues with taxes if I rent it out for under the market value?

Is breaking even a bad thing. (Their rent covers the monthly mortgage etc).

If the property only has 1 water meter should I pay that bill?

Is this a bad Idea?

[Jordan Robinson]

I think this can be a great idea in theory, but has some practical concerns to be aware of. Firstly, I don't think breaking even from a cash flow perspective is necessarily a bad thing, especially if it's purposeful in creating an opportunity for your family. Real estate historically appreciates overtime and also has tax benefits that you can take advantage of. With that being said, there are other costs you'll incur besides the monthly mortgage such as: maintenance costs, taxes, and insurance. To break even you'd want to make sure that the rent being paid covers those expenses as well. On top of that I would consider some of the screening concerns that you'd take into account with a regular tenant even though it's family. Are they generating sufficient income to pay the rent? Evicting a family member sounds like an awkward situation, I'd want to think in advance of how you might handle them not paying. 

I don't know of any issues with taxes that could occur from you renting under market value. I think the larger concern is if it's financially viable for you. 

Is this a multifamily or single family property? Would all family members be on one lease or would you have separate leases? Considering your lease structure may be relevant in the future should you decide to refinance.