Choosing the Right Neighborhood For Your Multi-family purchase

You’re looking for a nice multi-family property that you want to both live in and partly rent. How do you find it and what are some key factors to consider?

Not every neighborhood allows multi-family housing. Zoning laws are very specific. That’s the reality. So, the first step in your home search is to identify areas that do allow it or already have it.

How to Tell If Multi-Family Housing Is Allowed in an area

1.Call City Hall. Ask to speak with the zoning department and find out where multi-family (or “M/F”) housing is permitted. Most cities have a zoning map online, so you can confirm if a property is in a legal zone. I strongly recommend only buying a property that is properly zoned. The same logic applies if you’re looking for a home with an ADU like a basement apartment or an apartment over the garage. These also need to be legally zoned and permitted. Buying a home with an unpermitted apartment can lead to serious problems: you could be forced to evict the tenant, face city fines, and lose valuable income, not to mention lowering the resale value. Licensing Matters! In many cities, rental units are required to be licensed. For example, Denver began requiring licenses and inspections for all rental units a few years ago.  Some states have done it for decades.  This is a good thing. It protects both landlords and tenants by ensuring safe housing. When you talk to the folks at city hall ask them if licensing is required and what web pages you should look at on the municipal website.

2. Drive through neighborhoods. If you’re out scouting properties, look at the homes. Do you see multiple mailboxes at a single property? That’s a sign there may be more than one household living there. Check the utilities: Are there multiple electric or gas meters on the outside of the building? That’s another clue the property may have more than one unit.

Multiple mailboxes at a property often indicate that it is a multi-family residence.

3. Look on real estate websites for neighborhoods with multi-family listings. Open up your favorite real estate website and set a filter to Multi-family. Areas that have multiple listings are a good place to start looking. If you don’t see any, perhaps start by looking at the state as a whole.

What to Look for in a Neighborhood (Especially as We Get Older)

Once you’ve found areas where multi-family homes are allowed, start thinking about what kind of neighborhood best suits your lifestyle now and in the future.

1. Walkability

If you’re like me, you may want a “walkable” neighborhood—somewhere you can stroll to the grocery store, pharmacy, café, or park. Where I live, I can walk to four grocery stores (Whole Foods, Kroger, Safeway, and Trader Joe’s) within half a mile. That convenience makes a huge difference. I used to live in a suburban neighborhood where a car was required to go anywhere. That made sense when the kids were young, but now I want more convenience.

2. Urban or Older Suburban Areas

Older, denser neighborhoods often have more multi-family homes. Where I live, about 80% of the residents are renters and 20% are owners. That may be different from what you're used to, especially if you’ve lived in gated communities or large single-family homes.

3. Proximity to Healthcare

This becomes more important as we age. Cities tend to have hospitals and clinics nearby. That’s good for you and also great for rental demand, as healthcare professionals make ideal tenants: stable, responsible, and well-paid.

4. Nearby Amenities

Look for neighborhoods with restaurants, parks, libraries, and senior-friendly recreation centers. Many city recreation centers offer free memberships to seniors, with classes in yoga, dance, and more.

5. Safety

Here’s one of my non-negotiables:

If I don’t feel safe walking through the neighborhood at night, I won’t buy there.

Check local crime statistics (many police departments publish them online) and talk to people who live in the area. Want honest answers? Visit a local coffee shop or grocery store and approach people around your age. Tell them you’re thinking of moving into the area and ask for their perspective. Most people are happy to share their knowledge.

6. Social Connection

Being part of a community matters. Look for places with senior centers, hobby clubs, or other local gathering spots. Staying socially active helps you enjoy life and make friends.  You can check Meetup.com to see what groups are in the town.

7. Suitability for Aging in Place

Think ahead: How easy is it to get in and out of the house? I live on the first floor and rent out the upper level. It’s easier on my knees. Most older homes don’t have elevators, so avoid second-floor units unless you're comfortable with stairs.  If I found a home that had a vacancy on the second floor, I’d probably take it with the plan of moving down to the first floor, if and when that tenant relocated.   I would not push any tenant to move out.

8. Climate

Climate matters. I live in Denver, which has mild winters, dry air (great if you don’t like humidity), and a comfortable summer. It’s easy to get outside year-round. Think about your own preferences.  Chances are, you’ll want to enjoy the outdoors as much as possible.

9. Transportation Options

Even if you still drive, it’s smart to live somewhere with public transit options. I walk as much as I can, but I also take a Lyft to the nearby train station when heading to the airport. Instead of paying for airport parking, I ride the train—for just $1.50 each way with a senior discount. My neighborhood also has rentable scooters. I don’t use them often, but they’re a fun option!

Final Thoughts

Choosing the right neighborhood isn’t just about where you want to live—it’s about setting yourself up for comfort, convenience, and financial success.  Since you're planning to become an owner-occupant landlord, take the time to find a neighborhood that’s legally zoned, well-maintained, and aligned with your lifestyle goals.

Buying your first property, especially later in life, can feel overwhelming. But with the right approach and good information, it can also be one of the best financial decisions you'll ever make.