All Forum Posts by: Jacob Swihart

My wife and I purchased a house in Katy, TX a few years ago for $230k, right before the market surged. We secured a 3.2% interest rate and currently owe about $200k. The house is now worth approximately $315k.

Initially, we thought we'd stay here long-term, but we ended up with a larger house than we need. We've decided we want to move further out and get a few acres. Additionally, my commute is 25 miles each way.

Here's our plan:

1. **Lease our current house**: We believe leasing our house could be a good idea.

2. **Buy a mobile home**: We plan to buy a mobile home and place it on a leased lot 13 minutes from my office.

3. **Save money**: With reduced expenses (gas, power, tolls, etc.), we estimate that we will be about to increase our savings from about $600 per month to about $2,000 per month.

4. **Future plans**: After a few years, we aim to put a down payment on a piece of land and move the mobile home there.

Our goals are to build equity in our current house while working towards owning a nice piece of land and maybe eventually building a nice house on it.

**Questions:**

- I have no idea if my calculations on what the my costs for leasing the house are anywhere near accurate. My current payment with taxes and insurance is $1613/month(this is with pmi of $85/month. I just submitted a request to remove it). I'm seeing similarly sized homes leasing in my area for $2300/month. How big of an impact is losing the homestead exemption?

- How should I start with this? What do I need to learn? Are there any books I need to read?

- How do I find a tenant and manage a lease?

I'm not sure if this plan sounds crazy but my wife is on board and I think it's probably a good path to getting us where we want to be. I'm also not afraid of a little hard work but I'm feeling a bit overwhelmed and would appreciate any advice or guidance on where to start and what to focus on.

Thank you!

Hey Jacob,

It sounds like a great plan!

Couple things I wish someone told me when I rented out my primary in Katy:

- your taxes will go up dramatically over time

- cash flow is inconsistent

- while Katy is a fantastic rental market it's still competitive

To answer your questions:

- yes, the homestead exemption will increase your taxes at a faster rate but you can protest them either yourself (I don't recommend as I've tried and it was a pain) or with a professional service

- To start, you're either going to pay for books, classes, etc. or pay the school of hard knocks. Just search on BiggerPockets - there's a ton of great resources

- I would HIGHLY recommend using a leasing agent to find you a tenant. That was one of the most difficult and time consuming things when I was managing my own properties. And finding a good tenant makes the management MUCH easier.

Glad that your wife is on board - that's over half the battle!

Best of luck!

Thanks for the feedback. I think I've worked out an accurate number on what my taxes will be and I've gotten a quote for dp-3 insurance so I think I have a good understanding of those costs now. What is the cost of a leasing agent and do you have someone you can recommend in the area?

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Houston, Texas

Hello BiggerPockets community,