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Updated about 5 years ago, 12/04/2019
Thinking about buying a rental property in Houston, TX
I’m 27 and I recently moved to Houston from Canada. I’m thinking about buying my first rental property in the Houston area. I’m thinking of a 3-4 bedroom house with 2-3 roommates. I currently have 10 more months left in my lease. Do you recommend waiting until my lease is about to expire to buy the first property?
- Rental Property Investor
- Tennessee Florida
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@Gurpreet Chahal No reason to wait 10 months if you don't mind breaking your lease, which COULD hurt you if you end up leasing again.
I would rethink the roommate thing though. Roommates are awful. You'll be a landlord! You'll be in charge! You'll be all grown up! My suggestion would be to buy a duplex or a tri or quad so you have walls and separate doors between you and the tenants. Use an FHA loan so you're in this thing for next to nothing. But one that looks to you like it is basically move in ready. Maybe it needs a new fridge or a stove or some paint. Buy, move in, and LEARN!
@Lucas Carl Thank you very much Lucas. There is definitely some financial setback with breaking the lease unless I can find someone to take over right away. However, that’s not something that can’t be done.
Is FHA the way to go for someone starting out?
FHA is certainly *a* way, and not a bad one, for getting that first property. The other options (generally...there are certainly others) are the conventional 20% down, a VA loan for US veterans (probably doesn't apply), or a 203K loan, which allows you to move into a non-conforming fixer upper.
The main thing to remember is REI is a marathon not a sprint. Get started, keep moving forward, but don't feel like it all has to be done in by the end of the FY! Think in terms of years or even decades, not months.