Mortgage interest rates are high.
And home prices are sky-high.
But you know what’s also hella high?
The rent you paid your landlord on the 1st…
You get to choose which increased housing costs you prefer to pay…
Your landlord’s mortgage OR your own mortgage.
As a landlord, I benefit when people choose to stay renting.
I will have a vacant unit soon, and I am increasing the rent in that unit by $1,000.
Market rent has gone up since the current tenant moved in years ago.
So since I will be getting a new tenant, the new rent will reflect the current going rate for rent.
Why am I telling you this?
Because you can be the tenant paying more OR the landlord collecting more.
By the way…
My 1K rent increase is STILL cheaper than the market rent in my neighborhood.
Have my costs to run the building increased by $1,000?
NOPE!
That’s the beautiful thing about locking in a mortgage…
The cost of running a multifamily rental business doesn’t change drastically, but your profit will increase over time as the rents go up.
Especially if you buy in the right neighborhood.
To be clear though…
Your mortgage payment CAN go up.
What is Mortgage Payment Exactly?
A mortgage payment can include 4 things.
Principal
Interest
Taxes
Insurance.
PITI in short.
The P&I (principal and interest) portion of the mortgage is locked in.
The total P&I amount never changes. But the ratio that goes towards interest vs the principal changes over the life of the loan.
But the Taxes and Insurance on your property can change year over year, and this will cause your total mortgage payment to change.
Taxes and insurance primarily go up as the value of your house changes. So, you can expect taxes and insurance to creep up as the value of your house goes up.
For some context, my mortgage payment (total PITI) has gone up by $600 since I bought my house.
But because I house hack a multifamily house, I don’t care that the mortgage payment has gone up, because rents have also gone up.
And the increase in rent has far outpaced the cost to run my building.
Does that mean you should also house hack a multifamily house?
The biased part of me that knows how ONE multifamily house can change your life, would say HECK YEA!
But the real answer is, NOPE!
What type of house you buy should align with your financial goals and lifestyle.
But I do think it’s important for everyone to have some kind of additional income outside of a job.
Cause if 2020 taught us anything it’s this:
Life is short.
Your job is NOT secure
And no one is coming to save you.
If your preferred side hustle is multifamily house hacking but you need help with getting started…
I’ve got the start-to-finish blueprint to get you from not sure where to start to closing on a profitable multifamily house regardless of the interest rates and home prices!
The blueprint is waiting for you in CashFLOW Accelerator!
Hurry…
The next cohort is starting soon!
Have you talked to a real estate professional who assumed what you needed without asking you?
