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OP - don't buy a house. In addition to the above good replies, I'll note that just a few months ago you were thinking of moving to Atlanta. Renting is valuable for it's flexibility - financial, time management and ability to pick up and move whenever you want. Don't forget those are IMPORTANT things.
PS - I didn't buy a house until I was 33 years old. And I still retired at 52!
PS - I didn't buy a house until I was 33 years old. And I still retired at 52!
I didn't buy until my mid-40s! I envy your retirement...anyway, OP, if you don't want to buy one don't buy one.
But if you do decide to buy one to rent later, I feel areas near the universities (within a 15 minute or so drive) are probably good ideas - if you are willing to be a landlord to students.
I bought my small, 2br house knowing it would be enticing to Duke grad students should I decide to rent it out at some point. I could rent it easily, but have since decided that no way do I ever want to be a landlord and I'd instead sell it.
I bought my small, 2br house knowing it would be enticing to Duke grad students should I decide to rent it out at some point. I could rent it easily, but have since decided that no way do I ever want to be a landlord and I'd instead sell it.
In case it helps, I can afford up to about a $390k house.
You may have better luck renting with a lower priced house. Many of the potential renters that could afford the monthly rent on a $400k house may instead decide to buy.
Don't spend more than $125,000-$150,000 max on a rental property (that includes doing a full renvation to it as well). You start going much higher than that the rent you can charge will not go up by any similar percentage, it will be a diminshing return. Look for at least a 3 bed/2 bath single family home not in an HOA (don't want to have to pay any monthly fees). A decent 3 bed/2 bath home should rent for $1,400-$1,600 in good areas of downtown Raleigh and Durham. Altternatvely, a duplex would be a great option. Aim for 2 bed/1 bath each side and make sure you can make ~$1,000/side after the renovation. Again, being in downtown areas will be key. Since you are qualified for $390,000, use that to start a portfolio of 2-3 purchsaes.
The problem is though, finding these houses. If you are looking on the MLS or internet, it will never happen. You have to be resourceful and try to purchase homes off market in desirable areas.
Don't spend more than $125,000-$150,000 max on a rental property (that includes doing a full renvation to it as well). You start going much higher than that the rent you can charge will not go up by any similar percentage, it will be a diminshing return. Look for at least a 3 bed/2 bath single family home not in an HOA (don't want to have to pay any monthly fees). A decent 3 bed/2 bath home should rent for $1,400-$1,600 in good areas of downtown Raleigh and Durham. Altternatvely, a duplex would be a great option. Aim for 2 bed/1 bath each side and make sure you can make ~$1,000/side after the renovation. Again, being in downtown areas will be key. Since you are qualified for $390,000, use that to start a portfolio of 2-3 purchsaes.
The problem is though, finding these houses. If you are looking on the MLS or internet, it will never happen. You have to be resourceful and try to purchase homes off market in desirable areas.
Thanks. That's a very interesting answer. I see your point about diminishing returns.
I'm not sure how I'd get 3/2 for $150,000 inside the Beltline, though.
Thanks. That's a very interesting answer. I see your point about diminishing returns.
I'm not sure how I'd get 3/2 for $150,000 inside the Beltline, though.
The only way you're going to get something inside the belt line for that budget is to get a 2 bed/2 bath condo - there are a bunch around Cameron Village and the ones at Parkridge Lane/Brighthurst by St. Mary's & Wade that will go for around $200,000. Otherwise, you may luck out and see a 2 bed/1 bath house for under $300,000 ITB.
Sorry, but I don't know how it is.
Why do you wish to buy a house that you really don't want?
If you own a house, you build equity.
Houses offer a modicum of tax protection. You can deduct your mortgage interest and your property taxes. In certain circumstances you can deduct depreciation.
In some markets, there's potential for appreciation. If you rent, that hurts you financially. If you own, obviously it helps.
As a renter, you pay all the interest, property taxes, and maintenance costs as an owner (bundled together in one check and called "rent"), but you don't get any of the equity.
Houses offer a modicum of tax protection. You can deduct your mortgage interest and your property taxes. In certain circumstances you can deduct depreciation.
In some markets, there's potential for appreciation. If you rent, that hurts you financially. If you own, obviously it helps.
As a renter, you pay all the interest, property taxes, and maintenance costs as an owner (bundled together in one check and called "rent"), but you don't get any of the equity.
Stuff like that.
You don't always build equity. The market fluctuates. There are repairs. There is maintenance.
I would not buy a house if I did not want to own one.
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You don't always build equity. The market fluctuates. There are repairs. There is maintenance.
I would not buy a house if I did not want to own one.
Sure you could build equity - but once your HVAC system craps out and you need a new roof and hot water heater, you may or may not come out ahead as opposed to renting and investing the monetary difference. Not to mention the 6% commission you lose when you sell the house.
Last edited by pierretong1991; 06-03-2016 at 11:32 PM..
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