Should I continue renting or purchase with 0 money down?

Should I continue renting or purchase with 0 money down?

Mesquite, TX · Member since 2017 · 25 posts · 1 vote

I currently live in the DFW area and rent a 1 bedroom apartment for around $876 a month, maybe $1000 with water, electricity, internet, etc included; my lease ends at the end of May. I qualify for the VA home loan, which allows me to purchase a property (4 units or less) for 0% down and no PMI as long as I live in it. My agent found me a full duplex that has had the interior completely renovated for $350k, the larger side has a 1 year lease for $1,450 a month which would leave me paying $860 a month for my side if I don't rent out the other bedroom. I plan on being out of Dallas within 6 months, so I could also rent out my side for $1200-$1250 a month which would be a cash flow of just $340-$390 a month.

My ultimate goal is to keep my living expenses to a minimum, my plan this year was to sell all of my furniture and end my lease at my apartment to do travel nursing, which would allow me to pocket the stipend money and have no rent to pay. I have no landlord experience and know that PMs usually charge 1 month's rent to find you a tenant and of course any repairs or maintenance that may arise

With the following information, would it be better off to stay at my current apartment and just end my lease when it's time to take an assignment or should I purchase the duplex and possibly make extra income through cash flow and equity but also run the risk of repairs, maintenance, etc?

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  • Real Estate Agent · Garden City, NY · Member since 2016 · 3k+ posts · 1k+ votes
    8y

    @Michael Nieves

    There are rules about occupancy when you use a VA loan.

    Intermittent occupancy due to work is okay as long as you can show that you have a pattern of continuous residency in that community...

  • Member since 2016 · 13k+ posts · 12k+ votes
    8y

    The potential rent on th eproperty is too low to generate positive cash flow. Total $2700 on a $350K property is too low.

  • Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    8y
    Michael Nieves Simple math time! $1450 + $1250 = $2,700 per month $350K @ 5% = $1,879 per month 2% property tax = $583 per month $2,700 - $1,879 - $583 = $237 That’s $237 for insurance, vacancy, maintenance, cap-ex, maybe property management, etc. Or do get even more simple, $237 * 12 = $2,844 which means that one month of vacancy means all of those other categories above (including mandatory things like insurance) are all out of pocket.
  • Real Estate Agent · Dallas, TX · Member since 2016 · 432 posts · 341 votes
    8y

    @Michael Nieves I would find a more profitable SFH or MFH and then when you leave rent it out. Just my two cents... especially since you can just re-use your VA loan when you move (granted you haven't spent your limit on it).

  • Rental Property Investor · Edison, NJ · Member since 2016 · 753 posts · 565 votes
    8y
    I would keep renting until you can save 20% for a down payment to avoid PMI. Use your free time outside of work to research different markets so that you will be ready to buy a cash flowing property once you have your down payment saved up.
  • Rental Property Investor · Gulf Breeze, FL · Member since 2014 · 1k+ posts · 733 votes
    8y

    great question @Michael Nieves  sounds like you need to spend time on figuring out your goals and your Why. If it is investing to keep your living expenses down in the short term, maybe you buy nothing now and go the traveling nurse route, saving your money for down payments. Since you’ll be in different cities you’ll have an opportunity to see many markets and discover different places you want to invest. Determing your goals and passion is Step #1 in my 10 Step Guide. Love to hear your thoughts on it. 

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