I am buying a home for 195k. It is a 2700 sq ft home that is fully finished. I beleive the home is priced extremely well for the area. I think I can get 1100 - 1500 in rental income and I expect my mortgage to be around 1100 interest only (includes taxes and insurance). I am only puting 5 percent down and buying it owner occupied. Anyone think this is a good deal?
2006-12-31 07:20:17 · 4 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
If it sounds too good to be true, it probably is.
This isn't an investment that I would want to take a chance on. You are betting that the rent will be on time to cover your payments and betting on the tenants will take ownership-pride in the home (this doesn't happen often). Replacing furnaces and big-ticket items in the home can get expensive. (Yes, they can take them out of the house....I've seen it done).
Interest-only payments are a "trick" the lenders made up to allow people more affordable housing in a time when they can't afford it. They win, you don't. Unless the values of the homes in your area are skyrocketing, you won't make a dime on this one when you go to sell it.
I just wouldn't. But you'll learn....
2006-12-31 23:58:28 · answer #1 · answered by Barbara 5 · 0⤊ 0⤋
You should plan on occasional repairs and vacancies too. If you can't afford the payments without any rent income don't do it. Interest only loans aren't a good idea anymore. Huge value increases are history for a while. Save your money. There will be a lot of deals in a few months. I have almost 20 yrs experience.
2006-12-31 17:32:46 · answer #2 · answered by sm4125 3 · 0⤊ 0⤋
Not sure where the home is located, it looks like it is a pretty good price for the size of it. I think you'll have to occupy the home for min. 2 years before you can rent it out if you buy it as a primary residence. Interest-only loans are generally great if you are located in a hot-spot area (i.e. California, Florida, etc).
2006-12-31 15:29:35 · answer #3 · answered by Jen 2 · 0⤊ 1⤋
It matters where this house is located.If the house in a ghetto neighborhood you might have problems asking for big rent money.Always have the house inspected by a professional before you sign ANY papers.There's more than what meets the eye.
2006-12-31 15:29:03 · answer #4 · answered by kleenkarsrus2003 3 · 1⤊ 0⤋