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Town Home as Investment Questions
Posted on 3/14/15 at 6:25 am
Posted on 3/14/15 at 6:25 am
Hey guys, I have reas quite a few threads on this board and notices there are some pretty knowledgeable people lurking. I had a few questions for yall. First off I'm in the market for a new home, I am 25 and single and looking to spend up to 200k but would like to stay in the 170-180 range. I travel a good bit for work and may be away from months at a time. This makes me lean towards a town home, due to there be no outside maintenance. My plan is to buy a town home and live in it for a few years until I'm ready to settle down and have a family and move to a job position where I won't be traveling as much. I would then rent out my town home. So, I'm coming to yall for questions about rental property, is it a pain in the arse? I am currently looking at. 2 bedroom with an office and a true 3 bedroom, are the returns on a 3 bedroom that much greater then the 2 bedroom? Obviously, the price on the 2 bedroom is lower and I would have a lower note. However, in the long run the 2 bedroom won't rent for as much as the 3 bedroom correct? Pretty much the big question for yall is as an investment is it smart to go ahead and spend the extra 10k or so and get the 3 bedroom or stick with the 2 bedroom? I would obviously like to rent it out and actually make money on the rent instead of it just covering the mortgage on the home. Let me here some of yalls thoughts. Thanks.
Posted on 3/14/15 at 7:37 am to GeauxTime9
In my market the ROI for a 3bd for 10k would get you $300/mo more in rent, so your break even would be less than 3 years. Financing extra 10k would cost you around $50/mo with today's interest rates on a 30 year mortgage. For resale purposes it would be easier to sell a 3bd vs a 2bd. Assuming our markets are similar, the 3 is a no brainer IMO.
For some people being a landlord is cake, for some it is torture. A little trial and error is involved.
For some people being a landlord is cake, for some it is torture. A little trial and error is involved.
Posted on 3/14/15 at 8:53 am to GeauxTime9
3 bedroom
Take a good hard look at the associations financials. In the event of an assessment, you could quickly wipe out gains. Make sure they have money in the bank
Take a good hard look at the associations financials. In the event of an assessment, you could quickly wipe out gains. Make sure they have money in the bank
Posted on 3/14/15 at 9:07 am to GeauxTime9
Get the three bedroom. Look out for high maintenance/HOA fees.
Posted on 3/14/15 at 11:37 am to LSUwag
What are average HOA fees? This place has fees over $3000k a year, is this high?
Posted on 3/14/15 at 5:00 pm to GeauxTime9
You're 25, single and traveling. Stay in the apartment and put your money in the stock market. Buy the house when you get married (and I'd even recommend waiting until kids).
Posted on 3/14/15 at 5:09 pm to cwill
Why, put my money into something that i will never get back? The mortgage for a home will be just as much as renting an apartment in the Baton Rouge area. I am not married but have a SO that i have been with for years. This place will either net me a majority of money back when i sell it or earn me money over years from renting out. Your logic doesn't add up to me? Renting is throwing your money away. You are paying for something you will never see again.
Posted on 3/14/15 at 5:26 pm to GeauxTime9
quote:
This place has fees over $3000k a year, is this high?
The answer is dependent on what those fees cover.
Posted on 3/14/15 at 5:28 pm to GeauxTime9
quote:
This place will either net me a majority of money back when i sell it or earn me money over years from renting out.
Or the market drops and you lose money.....
Or you lose money renting it....
Posted on 3/15/15 at 6:00 am to GeauxTime9
quote:
What are average HOA fees? This place has fees over $3000k a year, is this high?
Sounds more like condo HOA's vs Townhouses. Hope cable/internet and a kick arse clubhouse is included
Posted on 3/15/15 at 7:36 am to GeauxTime9
quote:
Renting is throwing your money away.
Not quite true. If the market declines you will be glad you rented.
Posted on 3/15/15 at 11:42 am to GeauxTime9
quote:
quote: Renting is throwing your money away.
Not completely. Where I am, property taxes for the size house in the location I would want are around 6-8k. Throw in interest on a mortgage loan and I'd say I'm breaking pretty close to even at 1k a month rent (obviously I could find somewhere cheaper but not as desirable). That doesn't even include maintaining/upkeeping a place you own.
Posted on 3/15/15 at 8:51 pm to GeauxTime9
Check the hoa covenant and make sure you can rent it out. A lot of them restrict the number of units that can be rented at once.
Posted on 3/16/15 at 8:55 am to GeauxTime9
You may want to make sure renting or sub letting it isn't against rules of the HOA before you do anything.
This post was edited on 3/16/15 at 8:56 am
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