Many real estate investors understand the benefits and opportunities that buying a multifamily home provides. Multifamily homeowners typically live in one unit and rent the other units out, either to long-term renters or on the short-term rental market. Often, the rents collected on the rental units will cover the cost of the mortgage.
There are also tax benefits to owning an owner-occupied multifamily home, as well, as long as the multifamily home is four units or fewer. Typically the section of the multi family you live in is taxed as a single family. For the remaining units that are rented, the multifamily homeowner can write off all expenses incurred, including utility bills.
The multifamily homeowner is also allowed to depreciate the rented part of their property. Mortgage interest deduction is another great advantage to owning an owner-occupied multi family home, as it allows you to deduct the interest part of your mortgage payment that relates to the section you use for personal use from your income.
Another option is to turn multifamily units into condos and sell them. This increases value but has many moving parts including attention zoning laws.
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