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Owner Occupied Dwellings on the Rise as Homeowners Turn Landlord

Here’s a good way to make some money while owning a home. Become a landlord. Rent out part of your home. Specifically, rent out a separate unit in your home.

According to The Boston Business Journal, many new homebuyers are looking at multi-family properties as a way of earning some extra cash. Essentially, these prospective homeowners are exploring the idea of living in a building while renting out the other units in the building.

It sounds like a brilliant plan, right? After all, mortgages are at an all-time low and rents are sky-high. So why wouldn't it make sense to get in on this business idea?

In fact, 80 percent of multi-family properties are bought for this very purpose, according to Boston-area real estate brokerage, Equity Realty Plus.

Owner-occupied rental buildings make sense for homeowners from two standpoints. For one, the unit itself generates rental income. The stability of rental income can offset part of the mortgage expense and can provide a steady stream of income.

Second, the potential of rising real estate values is attractive for buyers, and an owner-occupied rental building provides the added benefit of rising in value while generating monthly income.

In short, they're often a great investment -- both short term and long term.

But keep in mind that money doesn't grow on trees. Even something as seemingly simple as collecting rent has its complications and headaches. As a landlord, you have duties and responsibilities. You also have liabilities.

While traditional investors might find themselves in a more passive role, perhaps even outsourcing the property management duties, the landlord in an owner-occupied building will likely have a more hands-on role in day-to-day property management.

Read our 10 Tips for Being a Low Risk Landlord and have a look at our related resources section below for more information.

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