Whether you are looking to invest in real estate and want to become a ‘live-in landlord’, this is probably the best time to buy a multifamily home in Nashville. 2014 was a banner year for investment in apartment buildings in Nashville. Nearly $749 million worth of multifamily homes were bought by investors, according to a report.
Experts believe that the demand for multifamily homes will continue to grow in the near future because of a steep increase in rents over the past couple of years. More and more investors are looking to add multifamily homes to their investment portfolios. If you are wondering why you should buy a multifamily home in Nashville, here are some of the reasons:
The biggest benefit of buying a multifamily home is that you can use the extra space for whatever purpose you want. If you have a large family, all can live under the same roof, but with the independence of separate living space.
Another alternative is to have tenants. If you’re financing your purchase with a mortgage, then the rents can greatly contribute towards your monthly mortgage instalments.
Possibility of strong price rise
Though there is no definitive science to determine how much your new acquisition will appreciate in value, but looking at the strong demand for multifamily homes, your property is likely to build good equity over the next few years.
Easy financing options
The federal government encourages the buyers of multifamily homes as they can borrow a higher amount of money at a low interest rate. Traditional home financing applies to multifamily homes up to four units. If the property contains more than four units, then it is considered a commercial property with different financing guidelines. There are many financing options you have including Federal Housing Administration (FHA) loans for multifamily properties. You need to put as little as 3.5% of the purchase price down to quality for a property containing up to four units. You also have the option of taking out a conventional loan, but you’ll need to pay a higher interest rate compared to FHA loan, depending on your credit history.
Needless to say, multifamily homes are comparatively expensive, so it’s natural to be wary of the risks. You should realistically calculate what your expenses and incomes will be. You will be able to reduce the risk factors, if you do your due diligence. It’s important to work with an experienced real estate professional who can guide you through the process of buying a multifamily home in Nashville.