Debating on Buying a House.. Very overwhelmed though..

[Brent Taylor]

Hello all!

I just created an account after reading and listening to threads/podcasts for the past few weeks. Firstly, I want to apologize if I am not posting a unique discussion and this overlaps with a thread that I have not yet seen. I have a lot of questions about owning and renting out a house.

Background: 

I am going to commission as a 2nd Lt in the Air Force and am heading to San Antonio (Randolph AFB) for training. Because of this, I somehow qualify for a VA loan ($0 down). I intend to buy a house and rent it out to myself and 3 other roommates for a year. There are two reasons why I want to buy a house 1) Because I want to start the learning process early in the hopes of one day owning many different properties 2) Because my father, a USAF vet who rented out 1 property in the past would be within the local area. Basically a point of contact when I eventually have to move.

I have not begun house hunting yet as I haven't had the time to go to the area in person. However, I've compared mortgages of 4 bedroom houses (new properties), added property tax, and insurance at 1% of the property's value. I'm still in the early stages but I'm looking at new properties between $160-190k next to the base. 

My questions are:

-Are there other costs associated that I need to know about?

-For a $180k house (with insurance,tax,mortgage) how much would you charge for rent? 

-What is a reasonable profit amount?

-Any concerns that come to mind for you experienced folk

I hope this discussion finds everyone well and hope everyone has a great day!

-Brent 

[Tyler Roicki]

@Brent Taylor Welcome to the site!

Great questions! You've already mentioned PITI, in addition to that you will want to account for any management fees, capital expenditures (think longer term), repairs / maintenance, and vacancy.

As for a new home at the price point as you are describing, I'd give a potential range of $1,300-1,500/mo. 

As far as a reasonable profit... You'd really be doing well to breakeven on the cashflow on a new property with 0% down. It's a challenge to get the cashflow to be positive with no equity.

I'm sure you'll get plenty of additional input in this thread. Feel free to reach out to me, would love to assist you any way I can in the future.