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Should my First Property In Vermont Be A Home or Rental Property?

You’re getting into the real estate market, spending hours looking at listings online, talking with friends, reading blogs (see what I did there?). Maybe you have a Realtor that you’ve been in touch with to help move the search/buy along.

And then you start to wonder…should my first property be an investment property?

The truth is that there are advantages and disadvantages. Let’s discuss.

Here are some reasons that you might want to buy a multifamily property as your first property.

  1. Collecting rent, and having someone else pay a big chunk of your mortgage, property taxes, and utilities means you can use Other People’s Money to build your net worth. If you end up with a monthly PITI (principal, interest, taxes, and insurance) payment of $2500, and you can get $1500 in rent, then there you go.

  2. In many cases, you can count part of the rent you’ll receive toward your qualifying ratios for a mortgage. Those ratios take into consideration your income, and your expenses to see how much they’ll lend to you. Generally, you can count part of the rent you’ll receive as your income. In that same example, maybe a lender will let you count 75% of the gross rent toward your income. That’s 75% of $18,000, or $13,500.  That little bump can increase your buying power.

  3. If you’re renting an apartment now, you’re used to having wall mates. You’ve built up a tolerance for the lifestyle. Why not keep it up for a couple more years while improving your financial situation (read: money and net worth) before jumping into the “American Dream”? It’s tough to go from owning a single family home to living in a duplex. But if you’re already kind of there…

  4. Tenants can be tough. But as the owner of a building that you live in, you have more control over your tenants. Plus, you’ll be right there. It’s a lot harder for problem tenants to dodge rent or to get a dog on the sly if they know they’re going to see you every day.

  5. Nothing’s forever. Give yourself a couple years, or more, and then re-evaluate. After two or three years, if you’re ready to be done with people living in your building, move out. Even after just a couple of years, the property will probably be worth more than when you bought it, and you’ll have some equity that you might be able to tap to help you buy your next place. Plus you’ll have the rent from both apartments to help with buying your next place. So, in this case, $1500 for two units (with no rent increases…) 75% of that annualized is $27,000 in lender language. And you still own the building.

  6. Or, sell the dang thing. You had a tenant paying some of your living expenses for a couple years, you have some equity. You’re ahead of the game. You don’t have to hold onto real estate forever. Take your wins and your stories and chart your own path.


And here are some reasons that your first property should be your actual home.

  1. Tenants can be tough (whoa, I’m getting deja vu). And the buck stops with you. You’re almost certainly going to have to do some “social maintenance” to make and keep good relationships with your tenants.

  2. If there are any maintenance issues, you really have to take care of them ASAP. In your own home, if the dishwasher doesn’t work, and you can live with it, fine. But you have to get it on the mend right away for a tenant.

  3. There’s usually more privacy in a single family property than a multifamily. I guess condos are an exception. But still, there’s more privacy. 

  4. Forever homes are hard to come by. Not because the homes themselves are hard to find, but because people’s lives change all the time. That said, you’re probably more likely to stay in a single family home (or condo) for a longer time than in a multifamily. So…you’re more likely to have a sooner move in your future.

  5. The strategy of renting out your first place and moving after a couple years still applies to a single family home. You can take equity out of it to step up, just as you can with a multifamily property..

  6. Sometimes one person wants to buy a multifamily, and another person doesn’t. I haven’t seen it happen yet where buyers on a “split ticket” end up with a multifamily. Not for their first house anyway. This one’s beyond the realm of real estate advice. Go with your heart.


Honestly, I think you’re good either way. It’s just nice to know that there are options, and there are different paths. 

The experts at Green Light Real Estate can guide you through decisions like this, ask the right questions, and really help you get exactly what you want. We’re here to help, and we’re happy to help!



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