Am I in trouble down the road?

[Eric Neal]

Hello, BP.

My wife and I just closed on a 2/2 1,059 sq. ft. condo in Durango, CO where we will be living for the next 2-3 years, maybe longer. 5/1 ARM at 3.375, 15 year am, $188,000 purchase price, loan of $169,200, monthly payment of $1,199. There is also HOA of $353/month that covers ext. insurance, water, sewer, ext. maintenance including snow removal, trash, and some shared amenities like pool and BBQ area. The condo is literally across the street from Fort Lewis college (liberal arts college with student body of 4,000). Our thought is that we could some day rent it to 2-3 students or MAYBE a family for around $1,800. The 50% rule says we would lose about $300/month as long as there is a mortgage but I won't be on the hook for roof, water heater, landscaping, etc. The city is growing and the trends seem to be moving in a positive direction but no one can predict the future. Sale isn't a great option because the condo is not FHA approved, seriously limiting our potential buyer pool. Also, we would like to make this our first investment property if it isn't a total bad move. Any thoughts from the group are greatly appreciated!