Advice on buying a single family home to live before renting out

[William Potting]

Hi all,

I'm still doing a lot of reading, researching and listening to the BP podcasts. I just finished The Millionaire Real Estate Investor and The Book On Rental Property Investing on Audible. I'm really excited about REI and I'm positioning myself financially to get started.

Currently I am renting but I'm looking at single family homes to purchase, live in for about two years (I'm in the Marine Corps and will be moving from Chattanooga, TN to Camp Lejeune, NC at that time) and then renting it out once I move. 

Has anyone ever done this before? I'm already familiar with "house hacking" from the podcasts, Brandon's book and webinars but with a wife and three kids, house hacking in a single family home is not an option. 

I'm also thinking about going PRO so I can take advantage of the calculator to help me out. 

Has anyone bought a single family home, lived in it for a few years and then rented it out? How did that work for you? Just looking for some insight and maybe advice.

Thanks!

[William Morrison]

Shop for a rental first.  The numbers should work as if you're renting from day one.
Then do you want to live there, schools (about 5s or better), transportation etc.  Better schools and neighborhood will be easier if you are an out of town landlord later.
Numbers, what are the expected rents and work backwards.
Take 25% of the expect rent as a minimum and add it to all expenses, loan, taxes, HOAs, etc.  The 25% will give you an approximation for vacancies and major repairs (roof, HVAC, etc).
Your expenses should include 8 to 10% for a property manager.  You'll need it when you transfer.

While doing that, interview property mangers even though you wont need one yet.  They know good neighborhoods or should.  They may manage across all types of neighborhoods and can be a great source.  Finding a good one in some areas of the country is tougher than others.

You'll get a better interest rate and down payment as an occupant.  My daughter is renting hers now.  Don't expect your numbers to be exact.  You just don't want to be taking money out of your pocket so your tenant can liver there.  <Grin>