Rental Advice

[waitingpatiently]

I have this idea and wanted to get some thoughts. Eventually we want to purchase a primary and rental property. We are looking in areas that many would say haven’t seen their worst declines yet (south carlsbad). My idea is to buy our rental now and live in it for a couple of years and then when the mid-upper price range has worked itself out purchase our primary. From what I have figured the cost to buy is just about what are paying in rent. Any ideas on how this would effect our purchasing power later? We would be putting 20% down on the rental and at least 30% down on our primary. Another side note, I will be finished with school in 2 years and will be working part-time. One concern that I have is that our downpayment $$$ for our primary won’t keep up with inflation.

Any thoughts?

[(former)FormerSanDiegan]

Generally a good strategy. Buying a house now as owner occupied will get you better terms than you can ever get buy buying a rental after buying an owner occ.

Also, if you buy the first house as a primary now and convert to a rental in a couple years you can take advantage of the tax credits for 1st time buyers currently available.

Also, if you are focused on a property that makes sense as a rental, you will buy smarter, with less downside, since you will insist on break even or positive cash flow. You will likely be more conservative than most people would when buying a personal residence.

The downside when you buy your personal residence is that lenders typically count 75% of the rental property income when figuring DTI levels. Again, this will reduce the amount you can pay for your personal residence. There is a silver lining in this, it keeps you from stretching too far on the primary.

As for the cash. It makes sense to put 20% down to get the best rates on the first house.

[(former)FormerSanDiegan]

Generally a good strategy. Buying a house now as owner occupied will get you better terms than you can ever get buy buying a rental after buying an owner occ.

Also, if you buy the first house as a primary now and convert to a rental in a couple years you can take advantage of the tax credits for 1st time buyers currently available.

Also, if you are focused on a property that makes sense as a rental, you will buy smarter, with less downside, since you will insist on break even or positive cash flow. You will likely be more conservative than most people would when buying a personal residence.

The downside when you buy your personal residence is that lenders typically count 75% of the rental property income when figuring DTI levels. Again, this will reduce the amount you can pay for your personal residence. There is a silver lining in this, it keeps you from stretching too far on the primary.

As for the cash. It makes sense to put 20% down to get the best rates on the first house.

[(former)FormerSanDiegan]

Generally a good strategy. Buying a house now as owner occupied will get you better terms than you can ever get buy buying a rental after buying an owner occ.

Also, if you buy the first house as a primary now and convert to a rental in a couple years you can take advantage of the tax credits for 1st time buyers currently available.

Also, if you are focused on a property that makes sense as a rental, you will buy smarter, with less downside, since you will insist on break even or positive cash flow. You will likely be more conservative than most people would when buying a personal residence.

The downside when you buy your personal residence is that lenders typically count 75% of the rental property income when figuring DTI levels. Again, this will reduce the amount you can pay for your personal residence. There is a silver lining in this, it keeps you from stretching too far on the primary.

As for the cash. It makes sense to put 20% down to get the best rates on the first house.

[(former)FormerSanDiegan]

Generally a good strategy. Buying a house now as owner occupied will get you better terms than you can ever get buy buying a rental after buying an owner occ.

Also, if you buy the first house as a primary now and convert to a rental in a couple years you can take advantage of the tax credits for 1st time buyers currently available.

Also, if you are focused on a property that makes sense as a rental, you will buy smarter, with less downside, since you will insist on break even or positive cash flow. You will likely be more conservative than most people would when buying a personal residence.

The downside when you buy your personal residence is that lenders typically count 75% of the rental property income when figuring DTI levels. Again, this will reduce the amount you can pay for your personal residence. There is a silver lining in this, it keeps you from stretching too far on the primary.

As for the cash. It makes sense to put 20% down to get the best rates on the first house.

[(former)FormerSanDiegan]

Generally a good strategy. Buying a house now as owner occupied will get you better terms than you can ever get buy buying a rental after buying an owner occ.

Also, if you buy the first house as a primary now and convert to a rental in a couple years you can take advantage of the tax credits for 1st time buyers currently available.

Also, if you are focused on a property that makes sense as a rental, you will buy smarter, with less downside, since you will insist on break even or positive cash flow. You will likely be more conservative than most people would when buying a personal residence.

The downside when you buy your personal residence is that lenders typically count 75% of the rental property income when figuring DTI levels. Again, this will reduce the amount you can pay for your personal residence. There is a silver lining in this, it keeps you from stretching too far on the primary.

As for the cash. It makes sense to put 20% down to get the best rates on the first house.

[(former)FormerSanDiegan]

P.S. – I assumed you would buy the rental in a part of town where prices have had more of a decline than the coastal communities.

[(former)FormerSanDiegan]

P.S. – I assumed you would buy the rental in a part of town where prices have had more of a decline than the coastal communities.

[(former)FormerSanDiegan]

P.S. – I assumed you would buy the rental in a part of town where prices have had more of a decline than the coastal communities.

[(former)FormerSanDiegan]

P.S. – I assumed you would buy the rental in a part of town where prices have had more of a decline than the coastal communities.

[(former)FormerSanDiegan]

P.S. – I assumed you would buy the rental in a part of town where prices have had more of a decline than the coastal communities.

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