Priced out of the single-family market? A multifamily home lets you live in one unit while renters help cover the mortgage. Here are the pros, the cons, and what to weigh first.
If you’re of millennial age or younger, BILLSHARK knows you’re facing financial pressures not encountered by previous generations, including huge student debt, soaring health and child care costs, and runaway real estate prices, particularly in the entry-level market.
If you’ve begun to despair that you’ll ever be able to own your own home, we’d like to suggest a possible avenue you might not have thought of: a multifamily dwelling. Before you object that you’d never want to be a landlord, take a look at the pros and cons.
1 What Is a Multifamily Home?
The accepted definition of a multifamily home is any house with separate addresses for each occupant. They could be duplexes, old subdivided Victorian houses, even apartment complexes with hundreds of homes. Typically, though, they’re types of duplexes, which allow you to live in one side (or floor) while someone else lives in the other.
Traditionally a purchase for professional real estate investors, the multifamily investment market is swinging toward first-time buyers who may have been priced out of the single-family market.
Ralph McLaughlin, deputy chief economist at the real estate data firm CoreLogic, calls these type of purchases the “mom and pop” investor segment. He recently told The Washington Post that this type of home sale grew from 48 percent of all investor-purchased homes in 2013 to more than 60 percent in 2018.
“That’s a sharp contrast to the rise in large institutional investors in the years following the [Great Recession],” he said.
2 The Pros
1. Easier financing
The biggest pro for first-time buyers is the ability to buy a home when they might not have been able to do so otherwise. This is because lenders often offer incentives for multifamily units that might not be available on single-family properties. Such incentives can include lower interest rates and lower down payment requirements.
For instance, first-time buyers may qualify for an FHA loan, which requires only a 3.5 percent down payment on the purchase price. If you qualify for a VA loan, you can buy up to a four-unit house with no down payment.
2. Help with your mortgage
This is the other big draw for first-time buyers. While you occupy one unit, you have renters in the other to help pay your mortgage. Depending on the market where you live, they could end up paying your entire PITI (principal, interest, taxes, and insurance).
3. Tax breaks
If the IRS views your purchase as an investment, you can typically write off all the expenses for the rental property, including the mortgage interest, maintenance expenses, and any upgrades you make to the property. You can also usually write off the depreciation.
3 The Cons
1. Repairs
When you’re the owner, you’re responsible for all the repairs on the property, including the roof, windows, appliances, the HVAC system, even the structure itself. This can amount to many thousands of dollars.
2. Vacancies
If you’re counting on your renters to help pay your mortgage, you’ll have to keep the rental unit occupied, which is something you can’t count on. This is why most lenders require you to have at least a year’s worth of rental income saved before the loan is approved. If you keep your rents slightly below-market for the area, this shouldn’t be a problem.
3. The tenants from hell
Probably every landlord in the country has at least one story about tenants who trashed the place, refused to pay rent or who consistently pay late, or hold frequent, large parties, among other horror stories. In most areas, you can’t begin eviction proceedings for 60 days, and even then you may have trouble getting them out of the unit.
4 Before Jumping In
If you decide to try the multifamily housing route, it’s important to do your research. In addition to weighing the pros and cons, be sure to sit down and do some hard figuring on your finances, cash reserves, potential rental income, the neighborhood, and so on.
“When buying a multifamily property as a first-timer, it’s important to know your limits. How much of a fixer-upper is too much of a fixer-upper? If you did have to fix up a property, would you have to leave multiple units vacant for a time? Would you be able to manage your [mortgage] payment with this considered?”
That advice comes from Minnesota real estate agent Jason Reed, who told Realtor.com that buyers should also start small.
“While it might seem like big risks yield bigger rewards, it’s often wise to ensure that you can handle what you’re getting into before you get stuck with a major liability.”
But if you’re having trouble finding a single-family home to purchase, this might just be the answer for you to find an affordable property, reduce your down payment, and generate cash flow.
And if you need to find extra cash, be sure to let BILLSHARK’s professional negotiators review your bills. If we don’t save you money, you pay nothing!
Share:
Billshark · Bill Negotiation Experts Helping consumers and small businesses stop overpaying on recurring bills.
Frequently Asked Questions
What counts as a multifamily home?
A multifamily home is any house with separate addresses for each occupant. That can include duplexes, old subdivided Victorian houses, or even apartment complexes with hundreds of homes. For most first-time buyers, though, it means a duplex, where you live on one side or floor while someone else lives in the other.
Why is financing easier on a multifamily home for first-time buyers?
Lenders often offer incentives on multifamily units that aren't available on single-family properties, such as lower interest rates and lower down payment requirements. First-time buyers may qualify for an FHA loan that requires only a 3.5 percent down payment, and a VA loan can let qualified buyers purchase up to a four-unit house with no down payment.
How can renters help pay my mortgage?
While you occupy one unit, the renters in the other unit help pay your mortgage. Depending on the market where you live, they could end up covering your entire PITI, which stands for principal, interest, taxes, and insurance. That rental income is a major draw for first-time buyers using a multifamily home to enter the market.
What are the biggest downsides of owning a multifamily home?
As owner you are responsible for all repairs, from the roof and windows to appliances, the HVAC system, and the structure itself, which can cost many thousands of dollars. You also face vacancies when a unit sits empty, and difficult tenants who trash the place, pay late, or throw large parties. Evictions often can't begin for 60 days.
What should I do before buying a multifamily property?
Do your research and weigh the pros and cons carefully. Sit down and run hard numbers on your finances, cash reserves, potential rental income, and the neighborhood. Real estate agent Jason Reed advises knowing your limits and starting small, ensuring you can handle the commitment before you get stuck with a major liability.
Should You Buy a Multifamily Home? is a Billshark resource with information and navigation relevant to recurring bills, consumer choices, and savings decisions.
Should you buy a multifamily home? Weigh the pros, cons, FHA and VA financing perks, and tenant risks first-time buyers face. See what to check first.
Visitors can use this page to review Billshark information and continue to the route that best matches their savings, support, or account needs.
Billshark publishes this information to help visitors understand monthly expenses, provider choices, and practical next steps.
The page connects visitors with related Billshark resources when they need additional detail or a more specific next step.
Priced out of the single-family market?.
If you’re of millennial age or younger.
If you’ve begun to despair that you’ll ever be able to own your own home, we’d like to suggest a possible avenue you might not have thought of: a multifamily dwelling.
The accepted definition of a multifamily home is any house with separate addresses for each occupant.
Traditionally a purchase for professional real estate investors, the multifamily investment market is swinging toward first-time buyers who may have been priced out of the single-family market.
Ralph McLaughlin, deputy chief economist at the real estate data firm CoreLogic, calls these type of purchases the “mom and pop” investor segment.
“That’s a sharp contrast to the rise in large institutional investors in the years following the [Great Recession],” he said.
The biggest pro for first-time buyers is the ability to buy a home when they might not have been able to do so otherwise.
For instance, first-time buyers may qualify for an FHA loan, which requires only a 3.5 percent down payment on the purchase price.
This is the other big draw for first-time buyers.
If the IRS views your purchase as an investment.
When you’re the owner, you’re responsible for all the repairs on the property, including the roof, windows, appliances, the HVAC system, even the structure itself.
If you’re counting on your renters to help pay your mortgage, you’ll have to keep the rental unit occupied, which is something you can’t count on.
Probably every landlord in the country has at least one story about tenants who trashed the place.
If you decide to try the multifamily housing route, it’s important to do your research.
That advice comes from Minnesota real estate agent Jason Reed, who told Realtor.com that buyers should also start small.
“While it might seem like big risks yield bigger rewards, it’s often wise to ensure that you can handle what you’re getting into before you get stuck with a major liability.”.
But if you’re having trouble finding a single-family home to purchase, this might just be the answer for you to find an affordable property, reduce your down payment, and generate cash flow.
And if you need to find extra cash, be sure to let BILLSHARK’s professional negotiators review your bills.
A multifamily home is any house with separate addresses for each occupant.
Lenders often offer incentives on multifamily units that aren't available on single-family properties, such as lower interest rates and lower down payment requirements.
While you occupy one unit, the renters in the other unit help pay your mortgage.
As owner you are responsible for all repairs, from the roof and windows to appliances, the HVAC system, and the structure itself, which can cost many thousands of dollars.
Do your research and weigh the pros and cons carefully.
Billshark negotiates your bills for you — no savings, no fee.
Billshark helps lower internet, wireless, cable, satellite radio, and other monthly bills.
Our experts handle providers for customers and share updates throughout the process.
Customers pay only when Billshark finds savings on eligible bills.
1 What Is a Multifamily Home?.
1.
2.
3.
4 Before Jumping.
Frequently Asked Questions.
What counts as a multifamily home?.
Why is financing easier on a multifamily home for first-time buyers?.
How can renters help pay my mortgage?.
What are the biggest downsides of owning a multifamily home?.
What should I do before buying a multifamily property?.
Rescue Your Finances: Smart Strategies for Recovery.
Financial Success: Smart Tips to Make Bankers Love.
Get Money Fast: Top Strategies for Quick Cash.
Expert Tips for COVID-19 Financial Challenges.
4 Reasons Why a Home Isn't a Good Investment.
FICO Changes 2025: How to Improve Your Credit Score Now.
The Real Cost of a Baby: Key Expenses & Money Tips.
Hidden Fees Hurt: How to Spot and Avoid Extra Costs.
Invest Your Values: Socially Responsible Investing.
Save on the Bills You Just Read About.
All Negotiation Services.
Corporate / Business Billing.
Blog - All Categories.
Home Budgeting & Finance Rescue Your Finances: Smart Strategies for Recovery Carolyn Depoto · Apr 6, 2020 · 3 min read Read article.
Home Budgeting & Finance Financial Success: Smart Tips to Make Bankers Love You Carolyn Depoto · Jan 13, 2020 · 3 min read Read article.
Home Budgeting & Finance Get Money Fast: Top Strategies for Quick Cash Steven McKean · Apr 28, 2020 · 7 min read Read article.
Home Budgeting & Finance Expert Tips for COVID-19 Financial Challenges Steven McKean · Apr 1, 2020 · 3 min read Read article.
Home Budgeting & Finance 4 Reasons Why a Home Isn't a Good Investment Steven McKean · Jun 10, 2019 · 7 min read Read article.
Home Budgeting & Finance FICO Changes 2025: How to Improve Your Credit Score Now Steven McKean · Feb 10, 2020 · 4 min read Read article.
Home Budgeting & Finance The Real Cost of a Baby: Key Expenses & Money Tips Steven McKean · Feb 4, 2020 · 3 min read Read article.
Savings Tips Hidden Fees Hurt: How to Spot and Avoid Extra Costs Steven McKean · Jan 29, 2020 · 3 min read Read article.
Home Budgeting & Finance Invest Your Values: Socially Responsible Investing Steven McKean · Jan 27, 2020 · 3 min read Read article.
See more posts for other categories ›.
Estimate My Savings.
College tuition articles.
Entertainment articles.
NerdWallet articles.
Shark Tank articles.
Social media articles.
Uncategorized articles.
Fairpoint bill savings.
Spectrum bill savings.
Terminix bill savings.
This resource helps readers connect a recurring-cost question with the Billshark information that provides the most relevant detail.
Visitors can review the available page sections, compare related topics, and continue to a more specific guide when they need additional context.
Billshark organizes service information and educational resources to make common household-bill decisions easier to research and understand.
The information on this page supports practical questions about providers, subscriptions, account actions, consumer choices, and monthly costs.
Readers can use the navigation and related resources to move from a broad question into focused information that matches their situation.
The page is intended to support informed decisions by pairing concise explanations with paths to deeper Billshark resources.
Relevant links help visitors compare options, understand recurring charges, and identify the next action that fits their current need.
Billshark content is designed to help consumers recognize recurring expenses and consider practical ways to manage them more effectively.
Visitors can return to this resource when they need to compare a new question with earlier information about services, bills, or savings.
The content connects everyday provider and subscription choices with broader guidance about monthly budgeting and household expenses.
Each page section contributes context that helps readers decide whether they need service guidance, account support, or an educational article.
Readers can use the available information to prepare questions, review options, and continue toward a useful next step at their own pace.
Billshark maintains connected resources so visitors can discover related guidance without losing the context of their original question.
The route supports research by making it easier to identify relevant details before choosing a provider, service, subscription, or account action.
Practical consumer information can help visitors understand why recurring charges change and which details are useful to review before responding.
The page brings together information that supports clearer conversations about bills, service choices, recurring expenses, and savings opportunities.
Visitors can use related resources to compare common terms, understand tradeoffs, and find the information that best fits their monthly-cost question.
Billshark guidance focuses on practical consumer decisions and helps readers move from general awareness into a more specific resource when needed.
The resource is part of a broader collection that connects household cost questions with provider information, support materials, and educational content.
