Purchasing my first rental property in 12 - 14 months, any advice?!

[Aaron Sommerville]

Hey Everyone,

I am completely new to Real Estate. 

My original plan was to save up for a year and buy my first home. After talking with my mentor (He's a realtor with 20+ years experience) he suggested purchasing a rental property first. He mentioned looking into FHA loans and after some research I see that you need to live in the home for 12 months before converting it into a rental property. One of my friends suggested finding a duplex.

I found a single family home built in 2004 for $240,000 and believe I can get 20% down within 12 months. However I am wondering what I need to have in addition to cover repairs and others things that I may not be considering.

Any advice and recommendations would be much appreciated!

Aaron

[Benjamin Aaker]

Good on your friend for suggesting house hacking a duplex. This is where you live in one side. You can purchase this with a low-money-down FHA loan. 

I recommend you budget 5% of the gross rent (for the whole place, even what the rent would be if you were living in it as a tenant) for repairs and 5% for capital expenditures.

Also you should inquire with insurance agents about the cost to insure. It will be higher than if you bought it yourself. Check with your municipality about how property taxes will change when you buy the place.