Why was our first home a duplex?

When we bought our first home we were living in a basement apartment. We were sick of sharing a garbage day and driveway and laundry with someone else and we decided to buy our own home.


When we set out to find the perfect home I definitely thought I wanted a townhouse. We looked at SO MANY townhouses. But what was in our price range wasn't great. So we decided to look at condos and guess what? They were pretty small. Also, we qualified to buy less on a condo than we did on a freehold home because the condo fees would eat up some of our available income.


So we started crunching the numbers... they looked similar to this (but lower because it was 2005, lol):

Option 1 - freehold townhouse

purchase price $500k

down payment $25k

mortgage $2032.08/month


Option 2 - condo

purchase price $450k

down payment $22 500

mortgage $1828.87/month

condo fees $450/month


Option 3 - small semi-detatched bungalow with apartment

purchase price $500k

down payment $25k

mortgage $2032.08/month

+$1000/month income from basement apartment


It was these numbers above that made us realize that our monthly cashflow was going to be best in option 3. You see were were not buying our forever home; we were buying our first home. We knew we did not want to stay in that home forever. We also knew that option 3 was going to help us get to our forever home faster as it allowed us to pay off the mortgage or save up faster.


We have bought 4 homes now. Every time we buy something we seem to run through this same exercise above and still end up back at a duplex. A basement apartment is a great way to help increase what you qualify for, offset your monthly costs and build wealth through real estate faster.


if you have questions about this or anything else mortgage related I am here to help,

Denise


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