Buying first home in Raleigh NC area

[Nathaniel J Mott]

Hi BP,

I'm planning on buying my first home in the near future and would like to rent out the remaining rooms.

I'm wondering what the community thinks my best option is. I was looking for houses in the 200k range but a mortgage broker hinted that I may be able to get a loan for 250k.  Is it smarter from an investment standpoint to buy a bigger house and bank on the idea that I'll have consistent renters to pay the mortgage, or would it be smarter to get less of a loan and be sure I can cover the monthly payments with just my salary?  

I'm thinking I could get a house with more rooms for 250k, which I would rent out. 

[Mitch Miller]

@Nathaniel J Mottit all depends on your risk tolerance. The banks don’t always look out for your best interests. If I were you I would continue to look for a 200k house that you could afford on your own and as you rent out the rooms you lower your expenses. I would also keep my eyes open for any good deals up to your pre approved limit but just make sure you are ok with the added risk. Just because it has another bedroom doesn’t mean you will be able to rent it out.

Also run the numbers. If you can buy 200k house and avoid pmi and put a decent down payment you might have a lot smaller payment than going as leveraged as you can and pay pmi. All in all you need to make the call. I just would not say a large house with more bedrooms is 100% going to get you more profit.