Buying a triplex as a first real estate purchase: a good idea?
Published on 12/05/2017
While most aspiring homeowners often look to the purchase of a single-family home as their first real estate investment, opting for the purchase of a triplex can be much more profitable in the short and long term for many reasons.
As a triplex owner, you may also be able to use the extra money to save for your old age, if accelerated mortgage payments are not necessarily your goal.
Still thinking about buying a single-family home? Buying a triplex is not the same as giving up on that dream. In fact, you may even be able to use the excess income mentioned above to put some money aside for that much hoped-for-purchase in a few years.
So there are multiple ways for you to take advantage of the high profitability of your purchase and achieve various financial goals. Note, however, that to obtain an optimal profitability, you should pay your triplex an amount equivalent to a maximum of fifteen times the rental income that is possible to get from it.
Secondly, it must be emphasized that the interest incurred by the purchase is deductible from the income generated by the triplex. This is a major difference from the tax rules surrounding the purchase of a single-family home, as the interest incurred in this situation does not offer the same advantage. If the operation of the triplex unfortunately places you in a deficit situation, the amount corresponding to the deficit will be deducted from your other sources of income.
In addition, it should be noted that the maintenance of a single-family home is entirely at your expense. In the case of a triplex, the costs incurred for the refurbishment of the building or by various maintenance tasks carried out on a daily basis can also be deducted from your taxes.
Do business with Steve Rouleau, real estate broker at Remax du Cartier to quickly find the triplex of your dreams and make a profitable investment.
Why buy a triplex as your first real estate purchase?
A better resale value:
The majority of triplexes are usually built close to amenities that tenants want, including recreational facilities and services such as parks, subways, elementary and high schools, and hospitals. Since the areas in which the majority of triplexes are located are highly sought after by potential tenants, properties located in these areas will appreciate in value more quickly. On the resale value, it will therefore be more profitable to buy a triplex than a single-family home as a first purchase.Rental income:
Provided you pay a fair price for your triplex, the rental income that can be earned from it is a great advantage. Indeed, the purchase of a house makes you (and possible your spouse) the only source of income to pay the mortgage payments. With the purchase of a triplex, you can pay the mortgage with the income generated by the rents of your tenants. By using the surplus money, you can even take advantage of it to pay off your mortgage as quickly as possible and thus, considerably reduce the fees paid in interest.As a triplex owner, you may also be able to use the extra money to save for your old age, if accelerated mortgage payments are not necessarily your goal.
Still thinking about buying a single-family home? Buying a triplex is not the same as giving up on that dream. In fact, you may even be able to use the excess income mentioned above to put some money aside for that much hoped-for-purchase in a few years.
So there are multiple ways for you to take advantage of the high profitability of your purchase and achieve various financial goals. Note, however, that to obtain an optimal profitability, you should pay your triplex an amount equivalent to a maximum of fifteen times the rental income that is possible to get from it.
High asset value:
When comparing a single-family home to a triplex of similar size, the triplex has a higher asset value. This higher asset value results from the fact that the triplex owner has a stable income, which allows him or her to have easier access to loans.Tax benefits:
First of all, if you live in one of the unit of your triplex, the gain related to this portion will be tax deductible.Secondly, it must be emphasized that the interest incurred by the purchase is deductible from the income generated by the triplex. This is a major difference from the tax rules surrounding the purchase of a single-family home, as the interest incurred in this situation does not offer the same advantage. If the operation of the triplex unfortunately places you in a deficit situation, the amount corresponding to the deficit will be deducted from your other sources of income.
In addition, it should be noted that the maintenance of a single-family home is entirely at your expense. In the case of a triplex, the costs incurred for the refurbishment of the building or by various maintenance tasks carried out on a daily basis can also be deducted from your taxes.
Do business with Steve Rouleau, real estate broker at Remax du Cartier to quickly find the triplex of your dreams and make a profitable investment.
