What To Buy For First Property?
I am looking to by my first property and don't know what price house I should be looking for. I just want a single family home that will generate $200.00 passive income a month. Should I be looking at $70,000.00 to $90,000.00 houses or $100,.000.00 to $120,000.00 houses? Any input would be appreciated. Thanks
ddaily,
Hello and welcome. You need to know your market before you can do anything. You might want to look around and check prices of home in the area you want to work in and then look for what type of houses youw ant to purchase..ie. rehab, foreclosure, abandoned, condemned, FSBO. I would suggest reading this site daily for about 1 hour each day and also be researching your local area for where you want to buy. Good luck
How are you planning to get the $200 per month passive income? Will it be through rentals? Through owner financing?
If that is your goal then find the property/situation where you can put the least of your own money down to achieve it.
As for my market. I am in the Houston/Woodlands Tx area, so the market is limitless. I just wonder if it is easier to rent a $80,000.00 as appossed to a $120,000.00 house. I guess since I am working with little cash, I should opt for the smallest down payment as possible.
Briefly, I have excellant credit, a perm residence with about $40,000.00 equity. I don't have a lot of cash but can come up with some if I need to. I am thinking I would like to aquire 5 single family rental houses in the next five years to generate about a $1000.00 extra cash flow a month.
This is what I have come up with so far and am just wondering if it sounds like a fairly good and safe plan to get started.
With 40K of home equity you have more than enough funds available to get started. I'd recommend tapping into that, get an established line of credit or loan and then find a CASH FLOW positive house/condo/etc...
If it was me I'd rather have a 90K house cash flowing 150 a month than a 120K cash flowing 150 a month because there is less capital tied up. Also, mult-families can be a good way to start. When starting out make sure your first one is a good experience and good investment because it will encourage you to learn more, do more and invest more.
Research, research, research. Be patient. Don't regret missing a good opportunity because more will come. I'd rather miss out on good opportunity than be stuck with a bad investment. A missed opportunity doesn't cost you money.
Good Luck and keep us posted...
Q
P.S. It is easier to rent out a 90K house than a 120K house because the monthly rent is cheaper. With today's rates most people who can afford to rent a 120K house can afford to buy and have been buying homes. There is probably a bigger pool of people able and willing to rent a 90K house.[ Edited by RunningQ on Date 02/03/2004 ]