Two Family home buying can be confusing.
In the spring of 2012, my husband and I, as young newlyweds, decided to look for our first home.
In the Fall of 2012, we closed on our first home – a two family.
First time home buying can be fraught with mistakes, however it’s also soooo exciting!
And full of potholes the size of a minivan just waiting to swallow you whole.
There are things you should iron out before actually scheduling showings, and we’re going to touch on them today.
What To Do As First Time Home Buyers
Get a good agent
As a buyer you have nothing to lose getting an agent. Generally both realtor’s compensations comes out of the seller’s closing costs. When you find a realtor who understands your situation, they can be a huge help in directing you towards the right house, and then getting everyone to closing smoothly.
Don’t feel pressured to use an agent if they don’t make you comfortable, or aren’t listening to your needs/wants. As a buyer you have no contract with the agent and there are so many to choose from. Find one that you trust and who is willing to communicate with you often during your search.
Be open minded
Often this is hard even if you are generally open minded. Many different things in our lives contribute to what we envision in a home.
I did not ever imagine buying a two family or being a landlord. If asked what the dreams for my life were, neither of those would’ve made the cut. However, for that time in our life, it fit and it worked out really well.
Look at lots of homes before deciding
Before buying Fixer #3 we looked at a good handful of other houses after originally seeing it. We knew deep down this was the one, but we had to be sure. Do the same when looking at two family homes.
But don’t drag your feet once you know it’s the right one
We also ALMOST lost Fixer #3, but because we had a great agent who was also fighting for us, we were able to pull the deal through.
We saw it 3 times, in order to make sure there wasn’t something horrible we were missing. The last time we ran back in the house to confirm with our realtor that we DID want to put an offer in.
Then a little while after our (contingent on our selling Fixer #2) offer was accepted, they got a non-contingent offer. It went so far as the house inspection and the buyers signing off on it, before our offer was able to convert non-contingent. Nail-biting.
If you know it’s the one, and it’s a wise, budget-friendly decision, go for it. Don’t think a seller is going to wait for you.
What Made Us Consider a Two Family
Back to 2012.
When our landlord/realtor (she was both) brought up the idea that we could afford a higher priced home if we considered buying a two family, we were intrigued.
So we went home after viewing another ‘eh’ single-family home at the top of our budget and searched for two family homes.
Then we went to see some.
Quickly we were in love with a 1920’s Craftsman that had gorgeous woodwork throughout and 2200 expansive sq feet.
Pros of Your First Home Being a Two Family
It can cover your mortgage and then some
We MADE at the most $150-200 every month by carrying the mortgage on the house. At the least, it broke even and we basically had free housing. It was awesome.
That, right there, was the #1 reason our first home was a two family.
It is a good way to become a business person
Being a landlord can grow you in ways owning a single family won’t. You will manage income from your home and care for it’s needs to keep it coming.
You can meet some cool people
As long as you properly vet your tenants, the potential to meet and make lifelong friends is great. We got to know the parents of one of our very first tenants. After 6 years we still keep in touch with that family, and her dad is our (and all our family and friends) go to countertop guy.
Cons of Your First Home Being a Two Family
Sometimes repair costs eat up the income from renting your second apartment
We were blessed with not being affected severely by repair costs.
For years before selling it, even though it never leaked, I worried that we would have to replace the roof. When we sold it in 2018, the financing bank found no issue with it, so we didn’t end up having to. They STILL haven’t replaced the roof as of 2021.
If we had to do a new roof, it would’ve easily been a solid 10-15k expense. Just be sure to check those things really well before purchasing. If you have it in the budget (as we will with Fixer #3), then don’t shy away from a home that needs something big like that.
If you don’t vet tenants properly, you can end up with doody-head people living on your property
Vet your tenants! It’s seriously important. Doody-heads are capable of BAD things.
We never had really rough tenants, for the most part, but the apartment building next to us never cared about the kind of people they were renting to. Usually it was a group of college kids who threw ridiculous drinking parties on weeknights where the neighbor on the OTHER side of us would call the cops on them.
Their overall attitude and behavior was a detriment to the whole neighborhood.
Important Considerations Before Buying a Two Family
- Are you handy or at least fairly capable of minor house repairs?
- If not, are you married to someone who is?
- Are you excited about meeting new people and willing to put in the work to vet tenants?
- Are you intrigued by the idea of being paid to live in your own home?
If you answered yes to most or all of the above, then I’d say you’re ready to look into buying a two family home.
There are ups and downs with everything. However, owning and renting out a two family can provide many benefits, including a solid income that isn’t affected by job status or unemployment.
Pray about it, consider all the pros and cons, find some two family homes to view, and then, if it’s a wise financial decision, run with it.
We hope your two family home buying experience is as positive and cost-effective as ours was!
