Sweet 2-4 Units
You might be thinking “why limit myself?” And you certainly don’t have to. If you have a lot of cash and you plan to flip your property, buying bigger buildings is a great way to invest.
However, the reason I recommend buying a 2-4 unit apartment building is because of the financing options. Right now, with a 2-4 unit building, you can get a 30-year fixed mortgage with around 3.5% interest rate, depending on your credit and when you read this blog. If you have 5 or more units your building is considered commercial property and you’ll likely be stuck with a 7-year adjustable rate, and who knows where interest rates will be in 2020.
If you’re on the cusp, remember that the same rule applies for your future buyer, who will be looking for his/her own financing options to buy your property. The more options, the more available buyers, the higher the price. If you don’t care about the resale value, you can pay off your loan fast, and you plan to collect rents into your grandchildren’s retirement, then 5-10 units may be more interesting to you. If you have any questions, contact me or click the “read more” button to leave a comment.
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