Buying first SFH in Riverside, CA

[Nate Doh]

Hi, I'm looking to buy my first rental property in Riverside, CA. This is my first rental property that I plan to househack on an FHA loan. I will not buy anything over $450,000 and will rent out the extra rooms. Are there any precautions I should be aware of before purchasing? Any help at all would be appreciated.

[Brad Sneckner]

Hey @Nate Doh! There are definitely a couple things to consider (which maybe you already have). First, you won't be able to use the room rental as income for qualifying on the loan. However, if you look at a multi-unit property, you CAN use rents from the other units to help qualify for the loan. Since you will be using an FHA loan, I would highly recommend considering a 2-4 unit property. A duplex often isn't TOO much more expensive than a good SFR, and the increase in down payment is minimal because it's still just the 3.5% for FHA.

With that said, if your heart is set on a SFR, I would definitely recommend exploring ways to increase your approval amount/purchase budget to get a place that has some decent space, and close to UCR perhaps (or another university). Renting rooms to students will really give you a solid supply of people that can afford the rent, and never have problems finding a replacement when someone moves out.

If you have any more specific questions, let me know! I'm local to Riverside as well, so good luck!