Increased Demand is a Good Thing forTwo-Flat Investors

We are currently in a period of increasing demand for rental housing. The DePaul Institute of Housing Study Shown Here pointed out last May that “between 2011 and 2014, Cook County saw an increase of almost 39,000 renter households, and 43.7 percent of all households in 2014 were renters.”

Two-flat pricing continues to rise in the Chicago market alongside increased demand, steering many private real estate investors towards higher-unit count buildings seeking higher cash flow per unit. This migration of private investors from two-flats to larger rental buildings will clear the way for current renters to consider purchasing a two-flat for a long-term, wealth building personal investment.

As this Chicago Defender article points out, investment in two-flat buildings has historically provided an opportunity to improve personal economic conditions through advancement as a landlord Article Here. By living in one unit and renting the second unit, an owner-occupant scenario provides a gradual introduction to all things landlord. Owner-occupied two flats subsidize housing expenses through collection of rent, and introduction of tax deductible expenses and depreciation. Additionally, the underlying asset (hopefully) appreciates in value, building equity during the hold period.

With two-flat inventories shrinking across the city, even stable demand for two-flats should lead to an increase in property value as supply decreases. DePaul’s May 2016 housing study points out that the percentage of two-flats compared to total rentals decreased from 36 to 31 percent over the period from 2007-2014. Physical deterioration of foreclosed two-flat properties from the housing crisis and single-family home conversion trends are believed to strongly contribute to this decrease.

As interest rates remain at historic lows, now is a good opportunity to set into motion a 30-year investment with stable debt obligations. Further bolstering borrowing ability for owner-occupied two-flats, 5%, 3.5%, or even 0% down payment loan programs are available.

Increasing demand coupled with decreasing supply provides a risk-mitigated opportunity to build wealth through two-flat investment as an owner-occupant. If you are interested in learning more about owning and living in a two-flat investment in the city of Chicago, please contact me today. I specialize in evaluating these investments and would love to help you understand how a two-flat investment may be right for you.

See full blog at www.chicagoREinvestment.com.