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Posted over 9 years ago

Top 6 Reasons to Occupy Your Investment Property

There are some very compelling reasons why you should consider occupying your investment property. Of the many reasons, I have boiled it down for you into the Top 6 Reasons to Occupy Your Investment Property:

1. Managing Your Property: In theory, you are your own best manager for your property. Assuming this is true in your case, what better way to make sure your property is well-maintained and that tenants are following the terms of your lease then by occupying one of the units? While occupying a unit of your investment property, you can easily spot necessary repairs, maintain the grounds, collect rent without getting in the car, and handle tenant concerns or questions quickly.

2. Save Money on Rent or Mortgage: By occupying one of your units in your investment property, you no longer need to pay rent or have a second home. This situation in many cases can result in your cost of housing netting to zero or even netting a profit. Imagine having permanent shelter that you control and getting paid for it. Not bad.

3. Lower Mortgage Interest Rates: When applying for a mortgage to purchase your 2-4 unit investment property, one of the first questions your mortgage lender will ask you is if you plan to occupy one of the units. One of the reasons they ask is because it affects the interest rates for obtaining a loan. If you buy the property as an owner occupant, you can expect mortgage rates that are as much as 0.5% – 1% lower than if you bought as a pure investment property. Saving money is always a good thing. Lenders view investment property as a riskier investment than an owner-occupied building which is why the rate goes higher if not occupied.

4. Lower Insurance Rates: As with mortgage rates, insurance companies view owner-occupied investment properties as less of a risk and thus they tend to offer lower rates. For 2-4 units, I’ve seen discounts from $500 – $1,000 per year if you occupy the building.

5. More Control Over Outcomes and Performance: When you live at your investment property, you have more control over it’s performance as an investment. You also have more control over the neighborhood and your surroundings. If you see something you don’t like as a result of being at your property every day, you can work to change it. If you didn’t live there, you may never have known about it. You can keep an eye on who is moving in an out of the neighborhood and what the market rents are. While living at your property, you may be able to spot an upward or downward trend in value or market rents before anyone else. This allows you to increase rents, or sell at the right time before the other landlords or investors catch on. You may know something about your particular neighborhood from living there that makes you best suited to spot deals in the area to acquire more properties. Knowing your market is easier when you live in it.

6. Learn Your Building and Fix It: When living at your property, you learn the in’s and out’s of maintaining it. If you spot a leak, you can fix it forever so that no one ever calls you about it in the future. It takes time to understand the nuances of any given property. After living there for about a year, you will know what needs to be fixed, what the potential recurring complaints or problems will be and you can work to remedy them before you move out. One of the challenges of owning investment property, especially a lot of units, is dealing with tenant requests and required maintenance and repairs. By living in the property and identifying all of the kinks, you can work to mitigate the amount of future tenant requests by fixing them during your occupancy.

Buying and occupying a multi-unit building is a lot of fun and is financially rewarding. I know because I’ve done it twice. If you want to know more about what it’s like and how it’s done, please contact me, I’d be happy to hear from you.

Learn more at my website, www.chicagoREinvestment.com.



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