Owner-Occupied Duplex Rentals
Wednesday, September 2nd, 2009Pros and Cons of Living Next to Your Tenants
When you live in the same building as your tenants, you see and hear everything. And that can be very good, or quite bad. Here are some pros and cons of owner-occupied rental property.
Pros:
You can keep an eye on things. When you live in your rental property, you will hear all the strange noises, see all the potential safety issues, and notice the dripping pipes long before they become major issues.
You’ll have a personal connection with your tenant/neighbor. Along with good communication, a personal connection can pave the way to an excellent landlord/tenant relationship.
Your tenant will behave better. Some tenants can be a bit like your kids—they do things when you’re away that they would never dream of doing in front of you. With their landlord next door or downstairs, most tenants will conduct themselves appropriately.
It’s a short trip to pick up the rent. Let your tenants know you’ll be picking up their rent check on the 1st of every month. They’ll have fewer excuses, and you’ll have your rent in your hand, not in the mail.
You could gain financially. Check with your lender, but if you’re living in the unit, there could be certain financial advantages regarding down payments and mortgage rates. Plus, your tenants help pay your housing expenses!
Cons:
Your tenants know where you live. When they have a complaint or a problem, they might feel like they have direct access to you, day or night.
You might have to share common areas. If you’re used to your own space, it could be a problem to share a yard, storage area, or a garage with your tenants.
You can only deduct the appropriate percentage of expenses from your taxes. If you put a roof on your entire building, only the portion that covers the rental unit is deductible. Check with your tax advisor, of course.