We really like the house we’re living in. It’s in a great area, great school district, and it’s the right fit for us now.
But I’ve got the itch again. Like I said in a previous post, I like the idea of rental properties. To purchase an investment property, you need to put down 20%. To buy a primary home, you can put down as little as 5%. Huge difference when you start crunching the numbers.
I entertained the idea of trying to buy an investment home, but it just wasn’t feasible. For example, if I buy a $100k investment property, I’d have to bring $20k just to get into the loan (plus any fees). This does not include any extra money you need to actually fix the house… and trust me, a house that’s $100k in any decent area will need some work.
Now, if you purchase a primary home for $200k, you’d only have to bring $10k to the closing table (plus any fees) to get into the loan. So you’re essentially getting double the house for half the initial costs.
So here’s the plan: buy a house, live in that house for a few years, then make that house into a rental property after moving to another house. The idea is to do this as many times as I can… and by that I mean, until my lender bank says “stop buying houses!!!” or when Layla starts going to Elementary School (whichever comes first).
So after some thought, I started to hunt for another house for us to live in and essentially making our current home our next rental property. This task is much harder than I thought it was going to be. We have a specific criteria that we want to stick to. Outside of what we want in the house, which is already hard enough to find, the house needs the following:
1. Needs to be a certain price – not only for us to be able to afford it, but the estimated monthly mortgage needs to be roughly below what the going rental price would be. This is important for when the house eventually becomes a rental property. Like any business, I’d like for it to be profitable!
2. The house has to be in a good school district – this is both for Layla and Ezra when they start school and to be more attractive to potential renters in the future.
3. We want to stay in a particular part of town – this is more personal than business related because it’s based on our preference.
Although houses become available all the time, it is extremely difficult to purchase because the market is soooo hot! I’ve bid on probably 4 to 5 houses and have lost every single bid! So if you’re thinking about selling your house… it’s a good time to do so!