Investing and income

[Amol Patel]

I am from Bay Area but can't afford to buy a home here. So was thinking of buying a home in Austin or some other high growth rate in the country. My aim is to,

1. Buy something below 300k.

2. Something that rents out faster. Is there a metric to know how fast a property rents out?

3. I can at least make break even money if not make positive cash flow.

Is this even possible? If so, my question is, if the rent is higher than mortgage why would anyone rent?

[Leland Barrow]

Good questions:

Below 300k is doable anywhere in Texas.

The metric is what renters are willing to pay. Usually a combination of how nice the property is and how competitive the rent is. There is a sweet spot that you can adjust up or down based on what your competitors have done. Market rent can be determined from real estate agent input.

Dont accept breakeven that is a terrible financial goal. That is the equivalent of having a goal of not dying while running a marathon. Your properties need to positively cash flow. Something that you do not know will eventually cost you money. That will turn your breakeven into a loss. You just died running the marathon. Instead train, prepare, plan and set aggressive goals. Train for those aggressive goals. If you train like you will finish top ten then it is highly unlikely you will kill over.

People rent for many reasons. They are transient, bad credit, lifestyle, saving for a house, its easy etc. millennials and boomers are driving the rental market. Both generations are transitional. Boomers are retiring and liquidating assets so they can travel. Millennials love urban environments where everything is walking distance. Millennials also tend to be broke with high cost of lifestyle choices. Boomers own 70% of the U.S. wealth and are driving retirement rentals. Rentals will be hot for a long time.