Would-be homeowners in the greater Los Angeles area should consider buying a building with available rental units.
Elizabeth McDonald, owner of TRG Realty and The Rental Girl, told me families typically look for a single-family home, check their credit score, and discover the amount of a qualifying home loan. An alternative approach may make financial sense.
"A small income property like a 2-unit to 4-unit building can be just as easy to qualify for as purchasing your first home. And, with an income property, you get the added benefit of additional income each month."
Elizabeth told me it can be a smart move financially if the numbers add up. A spreadsheet is available on the blog, "Renting in LA."
The first step is getting pre-approval from a lender and it's best to start early, even if the buyer is going to wait a year and make a purchase.
"There are lenders I recommend who will show the buyer what they can afford. There may be a number of issues to clear up like improving a credit score or boosting an income. One lender said he worked with a buyer who made a purchase 1 ½ years after the initial visit."
Elizabeth said the Los Angeles rental market is highly competitive and that means clean and safe rentals are always in demand.