Plenty of bargains on northern NJ multi family homes for sale
Recently, I have been a huge advocate of first time homebuyers having an open mind to multi-family homes in northern NJ. For the sake of argument, I am going to use Clifton, NJ as my example since my most recent inquiries were for Passaic County.
Let’s assume renters, or you are paying $1,250 for half of a 2 family home. Their apartment is likely 2 bedrooms with a full bathroom and a total of 5-6 rooms. This is about the average.
In Clifton, there are plenty of wonderful 2 family homes for sale for under $300,000. Let’s look at financing numbers. Please call us for a financial breakdown on any 2 family home in the area.
Call us today for a free consultation on how you can own your own multi-family home, which is overall a great investment opportunity.
Conventional Financing a $300,000 multi-family home
$300,000 x 20% Down Payment: $60,000 Down Payment
Mortgage Principal: $285,000
30 Year Fixed @ 5% rate : $1,288 Per month (Interest is tax deductable)
Hazard Insurance: $100 Per month (Tax Deductable)
Total Monthly Payment: $2,013
So now we have concluded that your mortgage payment plus other required charges will run you about $2,013 per month. Assuming you rent the unit you are not living in for $1,200 per month, this leaves you with remaining balance of $813, far less than what you are probably currently paying in rent on a similar unit.
Your risk is that your tenant moves out and leaves you with the entire balance to pay, which is why it is important to have a professional execute your lease so terms are “air-tight”. If your tenant were to move out, you still have their 1.5 month security deposit which can compensate for the vacancy while you look for a replacement tenant.
Now you are paying LESS than what you were paying for rent! It is important to use the rule of thumb and keep about 3 months of reserves handy. On this home, 1.5 months of reserves would total about $3,000. The only reason for this is in case of an emergency and for instance the water heater breaks. Knowing that you have a little bit of a reserve account will make you feel more comfortable anyway.
Whether you are looking for a 2 family home in Bloomfield, Clifton, Montclair, or any other part of Essex County, there are great deals out there.