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I know it seems like a silly question to some of you, but I'm revisiting the idea, because one of the counselors where I work said that she encouraged her children to buy property before they went off to college so that they would have an investment. Now, I'm kind of thinking in this vein, even though conventional wisdom says not to take on house payments if you need extreme flexibility. Renting does feel like a waste of money, though, especially since property is relatively cheap around here. I could find a decent for sale by owner property for around 20K-50K, even though it would probably be a manufactured home. For around 60K-90K, I could find a good 1200+ square foot house. I'm wondering if it wouldn't be worth the risk. I know for a fact that we have a lot of college students attending the local universities. Many of them would love to get out of the over-priced dorms. If I bought a three or four bedroom house, I could possibly rent out three rooms to students. If I charged $400 per month rent (more reasonable than the dorms or local apartments) per student, I could make around $1200-$1500 per month extra income. I'm just thinking.
More about me, for those of you who don't know:
I'm almost 30. I just started working full-time a year or so ago and make about 20K per year. I pay about $525 per month in rent and about $400 per month in transportation and living expenses.
I would definitely NOT be buying a house making 20k per year. With that level of income you are not going to have hardly any margin for things to go wrong.
...one of the counselors where I work said that she encouraged her children
to buy property before they went off to college so that they would have an investment.
For around 60K-90K, I could find a good 1200+ square foot house.
I'm wondering if it wouldn't be worth the risk.
If I charged $400 per month rent (each)...
I could (GROSS) around $1200-$1500 per month extra income. I'm just thinking.
I'm almost 30... make about 20K per year.
1) never volunteer to rent to undergrads.
2) never own a rental more than X miles from your home.
3) find an active local landlords group. join it. get a mentor.
4) find a better paying job.
5) LEARN enough to be able to answer the Q's you'll come across.
1) never volunteer to rent to undergrads.
2) never own a rental more than X miles from your home.
3) find an active local landlords group. join it. get a mentor.
4) find a better paying job.
5) LEARN enough to be able to answer the Q's you'll come across.
THEN see if you still want to do it.
I've heard there are tons of things that can go wrong, but that's mostly renting to party animals and section 8, right? A responsible graduate student would probably be different?
"Find a better paying job..." where am I supposed to look? I've applied to every school that might be hiring English teachers, nothing except what I have.
"Find a better paying job..." where am I supposed to look?
I've applied to every school that might be hiring English teachers, nothing except what I have.
Clearly... you need to look somewhere else.
Quote:
...heard there are tons of things that can go wrong...
There are books on it. In fact... start there.
Leigh Robinson's Book on landlording.
The Section 8 Bible.
I know it seems like a silly question to some of you, but I'm revisiting the idea, because one of the counselors where I work said that she encouraged her children to buy property before they went off to college so that they would have an investment. Now, I'm kind of thinking in this vein, even though conventional wisdom says not to take on house payments if you need extreme flexibility. Renting does feel like a waste of money, though, especially since property is relatively cheap around here. I could find a decent for sale by owner property for around 20K-50K, even though it would probably be a manufactured home. For around 60K-90K, I could find a good 1200+ square foot house. I'm wondering if it wouldn't be worth the risk. I know for a fact that we have a lot of college students attending the local universities. Many of them would love to get out of the over-priced dorms. If I bought a three or four bedroom house, I could possibly rent out three rooms to students. If I charged $400 per month rent (more reasonable than the dorms or local apartments) per student, I could make around $1200-$1500 per month extra income. I'm just thinking.
More about me, for those of you who don't know:
I'm almost 30. I just started working full-time a year or so ago and make about 20K per year. I pay about $525 per month in rent and about $400 per month in transportation and living expenses.
You need a big emergency fund. The last thing you want is for a non-paying tenant or big repair to hit when you don't have the savings to deal with it.
I've heard there are tons of things that can go wrong, but that's mostly renting to party animals and section 8, right? A responsible graduate student would probably be different?
"Find a better paying job..." where am I supposed to look? I've applied to every school that might be hiring English teachers, nothing except what I have.
But, how would you determine if the grad student was responsible? Many renters regardless of their status as a student or their profession are not good tenants.
And earning 20K a year, you would need a very large down payment in order to qualify to buy a house at 60K-90K (I suspect at least 5K-10K for a 60K house, and closer to 30K-40K for a 90K house), and I don't believe that rental income will count towards you income until you have documented that you have had rental income for a certain period of time (I'm not sure about this though, so hopefully someone will chime in and clarify).
Plus, in order to get a mortgage you need to prove that you have savings, typically about six months worth of mortgage payments, and if you rent rooms out then you would need to make sure that you had a very healthy saving account to make unnecessary repairs and to cover costs when you were between renters.
Like you previous post, I would highly encourage you to look for a teaching job that pays you at least equivalent to the entry level teaching wage in the public school system. Have you considered moving? That might give you more options. I know you want to buy, but sometimes you have to wait until you have more income and more stability. Buying a house when you aren't ready can be a huge millstone around your neck in the future.
As an investment no, ss a place to live instead of paying rent, yes.
First of all you will most likely need to be working full time 2 years to qualify so you may have to wait.
Where are you going to get the down payment and closing costs from? It could be over $7,000 for a $50K home.
If you can find a decent home for $59K or less your mortgage can be $500 or less, (depending on taxes and insurance) if you can then get a roommate that can pay for most of the payment.
Also while paying rent and with your normal expenses you won't be able to qualify for a separate mortgage.
You can't claim the imagined income for 3 college students as income to pay a mortgage.
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