Young Professional Rental Property

[Jonathan Horton]

Hi BiggerPockets,

I listen to all of the podcasts but this is my first post! I am 23 years old and bought my first house with 5% down in Charlotte, NC in April with the intent to use as a rental property if I had to be relocated in order to relocate in my career. In the past couple of months, I have been able to add a decent amount of sweat equity into to 1970s house in an upcoming neighborhood, however I am going to be relocated sooner than expected (next month). I make a good income and could rent my house out for about a $300/month gain, excluding savings for capital repairs and maintenance. While I believe I have a solid rental property, I haven't yet saved enough for another downpayment on a new property in Richmond, VA. My question is: should I rent for a year in Richmond while I save for a downpayment, or should I sell my Charlotte property in order to buy a new property in Richmond? Also, I have debated using the BURRR method but I'm not sure what would be considered mortgage fraud since I bought it with the intent of living there with roommates, but I am having to leave so soon.

P.S. My company will pay for all closing costs associated with the relocation.

[Robert Santangelo]

A couple of questions to ask yourself:

1. Are you prepared for being a long distance landlord with your first investment property? In other words, do you have contractors in place to handle repairs, turnover, etc?  If not, is management cost factored into your numbers, above?  If you go the mgmt company route, get clarity on fees/costs, look at properties they manage/get, and get references of other out of towners who are using them.

2. Do you envision returning to Charlotte at some point?  If so, then this is a positive check mark for making it a rental.

3. Will your employer will monetize your relocation benefits if you don't sell/buy.  (Unlikely at most employee levels, but it's worth asking.)

As a general rule of thumb, I'm a fan of people renting for a period of time in a new city so that they can make a more informed decision on what area fits their lifestyle, but that's more of a personal belief than a suggestion.  I hope this gives you more food for thought...good luck.