Advice

[Anthony Snyder]

hello bp members,

I'm looking for advice on what I should do for my first rental. My girl friend and I are looking to purchase another house here soon. I took out a mortgage 3 years ago when I was 22. It's a lake front property only electric motors. I'm debating if I should sell it are or rent it out. I have a 3.6 interest rate locked for 30 years. I owe 79,000 and bought it for 84,000. Zillow estimates it for 120,000. Plus I added a bedroom by using half of my garage. Now it sits with 3 bedrooms. Could you guys please give me some advice I really want to start investing in real estate. I also don't have such a good credit score because I was late on my payments but for the last year and a half I have not been late on my bills plus my score went up 100p but I'm sure I still can't take out a loan and purchase another house just for renting. Thanks friends! 

Anthony

[Grant Berthold]

Who's they? I wouldn't trust zillow's rental estimate. Like J. Martin said, you need to look around the area to see what other houses of similiar size, bedrooms, area are renting for. If in fact you can rent it out for $1025 and make your tenants pay the utilities, and your payment is $500-600 (I'm guessing), then it seems like it would it would cash flow well. But if it would only rent for $600-$700, it doesn't seem like it's worth renting, and maybe you might be better off selling as long as you could get a decent price. 

You could possibly get an FHA loan if you and your girlfriend moved into the next house you bought. They allow for a credit score as low as 580. FHA loans also allow you buy multi-family properties, so you could live in one unit and rent out the other units.