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It is not easy to buy a first home, so here’s a proposition that can be surprising: Instead of buying buying a system, several. What I propose has nothing to do with late night infomercials or books, the fast and easy wealth from real estate promises. Instead, many first time buyers can benefit from an interesting character in the mortgage system.

When you hear people talk about “real estate financing,” they usually share two categories of mortgage loans for homeowners and loans more expensive and difficult for investors.

“The financing of investment” is for buyers who do not live in a physical property. “Freehold” are ready for homes, places where we stay the night, the phone rings and the car is parked.

But there’s a wrinkle:

Homeowner financing with little down and rates are usually lower for the purchase of more than one house. Usually you can get financing for owner-occupied houses with one to four units, as long as you stay your best.

In other words, your status as a homeowner to buy more than just a house or condo. You can actually buy a property that generates rent and increases your tax deductions.

If you buy properties from two to four units of the real world changes in real estate financing. Lenders will be more than your rental income for purposes of qualification. This means you can borrow more money - and also to produce than a loan with properties for rent such a balance.

Suppose you buy a property with four units. You live in a live and rent the other. Each of the three rental housing rent at the market price of $ 1000.

In this situation, you’re probably double. First, the lender will include a portion of the rent - say three quarters - as income for you to determine your qualification standards. be added in other words, $ 2,250 per month to your income. ($ 1,000 x 3 = $ 3000 units. $ 3,000 x 75% = $ 2,250)

Why $ 2,250 and not the whole $ 3000? As the lender of it you have vacancies, repairs, insurance, taxes and other fees for rental housing.

The lender also takes something else: For tax reasons, three-quarters of assets in this example is “investment” in real estate. When filing your taxes your list rental and cost of these units. One of these “costs” of depreciation, a device that will reduce your accounting functions, but not in cash from his pocket.

As lenders see Depreciation “add” that the cost of your monthly income. The result is that your actual monthly income for loan qualification, the same increase of more than $ 2,250 in this example.

The purchase of two properties of three and four-unit can do a lot of sense, especially for first-time buyers. They “help” meeting monthly mortgage payments, particularly in the early years of ownership - the time, often the most difficult. Later, when you move, you can sell the property or you can choose to keep the rent and to choose the unit was to stay.

The value of goods with all investments, not always to the higher annual income is guaranteed. Some owners may feel uncomfortable, tenants so close and there is always the possibility of inadequate rent, offers excess and major repairs.

Go too far, too cautious. While up to four units is in order, five units automatically classified the property as “investment” homes under the guidelines for most loan programs, a title that can not use the funding homeowner, even if you are on the property. Live

The good news is that the owner / resident and also as an owner, you invest a lot of experience on the practical aspects of real estate.

The property requires maintenance and constant monitoring. As a homeowner a few units, you will learn on the job “of making repairs, dealing with tenants, rental and maintenance of the property entrepreneurs. These results are valuable income and wealth over a lifetime can pass. In fact, many people who became successful in real estate often began with only one real estate finance owner-occupied little lower - and three fifty-eight units.

To discuss the details with the appropriate professionals. Lender may tell you about funding available, brokers can provide information on the local charm and style that you will get a pro, that explain the tax benefits of the multi-residential property.