Buying Multi-Residential Properties in PEI
Multi-residential properties, such as duplexes, triplexes and apartment buildings, can appeal to buyers seeking rental income, long-term ownership opportunities or a property that helps offset their own housing costs.
Living in One Unit and Renting Another
If you are interested in living in one unit while renting out a second unit to a tenant, then a duplex may be an ideal option. The rent you charge may help cover your mortgage, utilities, maintenance, property taxes, and other expenses that come with owning and operating a home.
Small Multi-Unit Properties
Properties containing two to four units may qualify for residential mortgage financing, with requirements depending on whether the buyer will occupy one of the units. Properties with five or more rental units are generally financed under multi-unit or commercial lending programs. Buyers should confirm the available financing structure with their lender or mortgage professional.
Down Payment Considerations
Financing requirements vary substantially depending on the number of units and whether the buyer will live in the property. Under current CMHC programs, qualifying owner-occupied properties with one or two units may be financed with as little as 5% down on the first portion of the purchase price, while owner-occupied three- or four-unit properties generally require at least 10% equity. Non-owner-occupied properties containing two to four rental units generally require at least 20% equity. Properties with five or more units use different multi-unit financing programs. Buyers should confirm current requirements with their lender or mortgage professional.
Working With the Right Professionals
Because financing rules, rental income calculations, insurance requirements, and property management considerations can vary, it is important to work with experienced professionals before purchasing a multi-residential property in PEI. A CENTURY21 REALTOR® can help you compare available listings, understand the income potential, and connect you with the right mortgage and inspection professionals as you evaluate your options.
