Should I be afraid of renting out homes over $100k?
I have a home valued at $170K. My monthly payments are $1365. If I bought an investment home for about that same price, how do I know if I can rent it to cover my expences? I mean, I would pay $900 to rent a house, but $1365/mo, I would just buy. I know I should check the papers, but are there renters out there that pay that much and more just to rent? I was only thinking of buying in the $100k area just so they can afford to make the payment. Is this a worthy fear?
justmjc,
It depends on the area that the property is located in. You should get in touch with a management company and ask them what the average rental rates are in that area because you are considering buying a rental property there and you may or may not need someone to manage it. You need to find out the demand in that area. Are a lot of people renting near the property in question? If so, what are they paying? You can drive around the neighborhood and if you see any for rent signs, then ask them how much is the rent. Act like a renter and find out from other landlords in the area.
Tanya[ Edited by tanya1215 on Date 06/25/2003 ]
I live in michigan and don't think it would be much of a problem at all to rent a house out at $1400+/month. Something else you might want to consider is an executive lease if you can afford to have the house completely furnished and everything. I know people who do it quite often with more expensive houses, they mostly draw from the car companies that have execs come into town for a year or two.
I think I might chirp in here: One of the biggest mistakes people make is to make decisions based on "their own value" systems. You may not be willing to rent for $1,500 an month but, believe it or not, some pwople would regard that as a normal expense to maintain their lyfestyle or image, etc. If you are in business, you can't afford to make those kinds of judgements.
[addsig]