Converting Current Home as First Rental

[Justin Dyer]

Current home is a TH in Chantilly, valued at just over 500K, owe 350k. I have a VA loan on it now, which I am constantly checking Bankrate for a good rate for conventional non-VA, non-FHA loan. Rentometer is showing that a neighbor in my row of THs is renting out at 2200/mo. With current rates, taxes, and HOA, I would *make* $170/mo. This is not including any capex, repairs, warranties, property management, vacancy, etc. I feel I can charge 2300 since we have a larger deck and fence. I understand that $270/mo, saved away for expenses, is not an attractive deal, but I am still considering it because of appreciation. It has gone up over 100K in 9 years.

I want to buy another TH in the area and pay down its principle and repeat the process. Tons of tech jobs are surrounding the area, Google, Amazon, MS, etc. all have a major presence.  I can afford to float both THs for as long as necessary and pay for repairs, new roof, whatever. Is anyone else considering a similar move, or have already done it? 

[Dan Robinson]

I'll chime in here... I've done exactly what you are doing. If you are looking to build a large portfolio of properties and live off the cashflow, this is not the way to do it. If you're looking to build long term equity without a ton of headache, this has worked for me. Our rentals are ones that either I or my wife lived in before we were married. They are in nice areas. They do not, or at least did not, cash flow, nor have they appreciated significantly (some, but not a ton). On the other hand, I get good tenants, maintenance is low & one of the houses is now paid off completely. 

Bottom line, no cash flow to speak of, not a lot of appreciation, but someone bought me a house. Still a good deal if you ask me.