Posted on: Friday, September 5, 2003

Buyers find financial benefits of multifamily homes harder to resist

By David Tyler
Rochester (N.Y.) Democrat and Chronicle

When Annie Fitzpatrick began house shopping, she looked at single-family houses. But the 26-year-old engineer ended up buying a three-family house instead.

"It's just hard to find a single-family that's specifically what you want," she said. "With a triple, I actually ended up with a nicer place to live."

The popularity of two- and three-family houses is growing steadily, for a number of reasons, real estate brokers said. Top among those is the income that comes from renting out the other units makes multifamily houses an attractive alternative.

Broker John J. Higgins of Higgins Properties in Pittsford, N.Y., said buyers are looking at multifamily houses as an investment. But in many cases, they are also looking at multifamily units as a way to afford "more house."

"You can live in a house essentially for nothing, as the other units pay your mortgage," Higgins said.

That was part of the buying rationale for Tim Webber and his fiancée, Colleen Savage, who recently closed on a two-family house in Rochester, N.Y.

"Financially it just made more sense," Webber said. "Why not have the extra income? And the apartment we'll live in is much larger than what we could have afforded if we bought a single-family."

Fitzpatrick recently closed on her three-family house in Rochester and will move in this fall. She also says she was attracted to the financial benefits of multifamily ownership.

"With the economy being so unstable, this offers me a little bit of stability," she said.

Fitzpatrick's fiancé, Jeff Amico, owns a duplex in the city. Amico also bought his home after searching first for a single-family, she said. Fitzpatrick says they hope to keep both after they marry.

"At some point, we'll probably live in a single-family, but I can see us holding onto these as an investment," she said. "Doing the math, you get a better return on your investment with a multifamily."

But like the single-family market, where multiple offers have become the rule rather than the exception, competition in the multifamily market is heating up.

Webber put in several offers on other houses before finding the one he bought. "It just seemed like every open house we went had 50 other people looking at it," he said.