Richmond, VA · Member since 2013 · 31 posts · 3 votes
Do you purchase a rental property the same way you purchase a home for yourself? For example:
Rental property is $50,000
I have the down payment but will need to borrow money from a lender to pay the property.
Say all goes well, would I used the income from my tenants to pay off my rental property's mortgage? Or is there other ways of going about paying it off? (OR do I have to get a mortgage for a rental property at all?)
Real Estate Broker · Mount Olive, IL · Member since 2013 · 1k+ posts · 310 votes
12y
@Account Closed Simple answer is "NO".
When you buy a home for yourself, you mostly look for school district, neighborhood, amenities, etc.
When you buy a home for income, you criteria changes to basically cash flow (appreciation for certain areas).
Typically your rent should cover everything like PITI, repair and maintenance, etc and your tenant pays for utilities.
Read @Brandon Turner beginner's ultimate guide to real estate investing. This guy is awesome and great individual. You will learn a lot from him as I have.
Real Estate Broker · Mount Olive, IL · Member since 2013 · 1k+ posts · 310 votes
12y
@Account Closed Simple answer is "NO".
When you buy a home for yourself, you mostly look for school district, neighborhood, amenities, etc.
When you buy a home for income, you criteria changes to basically cash flow (appreciation for certain areas).
Typically your rent should cover everything like PITI, repair and maintenance, etc and your tenant pays for utilities.
Read @Brandon Turner beginner's ultimate guide to real estate investing. This guy is awesome and great individual. You will learn a lot from him as I have.
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
12y
If you have the cash then no you do not need a mortgage you can make a cash purchase. If you do not have the cash and you need a lender to loan you money for the purchase then yes you will need a mortgage, that is unless you know someone willing to give you an unsecured loan and then use that money to purchase the home all cash.
Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
12y
@Account Closed a
Yes, I do! I buy houses as personal properties with the explicit point of renting them out when we leave. My husband is active duty so we are nomadic. In addition, using personal property financing is cheaper and less of a down payment. Therefore by living in the house as long as the military/lender allows than moving on has allowed us to get 2 rental homes with nothing down using a VA loan.
Honestly it depends on your goals. If you plan on living there forever than i would buy on what YOU want. If you want to turn it into a rental, than I would buy it for being a rental but than just live in it.
That being said, all of my rentals are aimed at my peer group in areas that I would want to live. So while I certainly am not looking for personal properties (granite countertop, stainless steel appliances, turnkey :) or the guchiest neighboorhood ) I am looking at schools and neighborhoods.