When shopping for a property, many people focus on buying a condo or a single family residence. While both of these options are fine, an option many people in my experience don’t consider is buying a two-unit building. While they may feel that they will not qualify for a high enough mortgage, the bank will take into consideration the rental income of the unit that will be tenant-occupied when deciding the loan amount. And although most two-unit buildings in San Francisco are not cash-flow positive, over time they can become cash-flow positive and pay the mortgage of the building so that you live “rent-free.”
My husband and I bought a two-unit building in 1998 so we could live in one of the units, the lower unit, which looked out onto a garden I loved. We moved in and renovated that unit, condo-converted the building and when the tenants upstairs moved out, we renovated the upper flat and moved into that and rented the unit below. This was over a period of 8 years; it didn’t happen overnight and everything was not easy.
The rent now pays our mortgage and real property taxes, and we have two legally separate condos. That’s why buying a two-unit building can be a beautiful thing! If you’re thinking about a two-unit building, give me a call! I’m an attorney, have managed my own remodels, and know the ropes in San Francisco and can help you develop a strategy. By the way, the photo is of an architecturally significant two-unit building with a charming cottage in the back that I am bringing on the market in Eureka Valley soon.