All Forum Posts by: Rob Randle

For me it all depends on the tax rate you are at vs your personal finances. Mortgage interest is pretty much the only personal tax "loophole" so to speak for W2 income earners. Since the US tax system is progressive, everyone wants to get down in the lower level of taxation, writing off that $50k or so per year will lower your AGI just enough so you won't get hit with AMT and lose those deductions just because you're considered "rich" at 250k per year :)

Second, it only makes sense if your mortgage + ownership costs (tax, insurance etc) are as close as possible (or lower) to your rent AND you bought in an area that you cross your fingers and hope it will appreciate significantly in next few years. Realize the fact that for first 10 years you will barely pay ANY principal back. That's one big gotcha most people don't realize, you are renting your home from.. "the bank" and you'd better stay in it or pray it appreciates, else it's an expensive rent. On average US families change houses every 7 years while getting 30 year mortgages, that's very expensive rent if your home didn't appreciate.

Regarding the 5% yes, you can, but expect the APR to bump up by 1% or so due to the increased risk plus that PMI added as well. However, gotta lose some to win some. You can remove PMI once the property appreciates so your loan becomes again 80% LTV.

Rob if it is a "personal property" i.e. a house that you plan on living in for 12 months period (the time requirement). Than you can do a 5% conventional. Now if it is an investment that is totally different. I would NEVER put 20% in a personal property that defeats the purpose. When we ran out of first time home buy and VA loans, we did 5% conventional.

@Rob Randle after many years as a homeowner, I've recently concluded that I want to be a renter. I think being a landlord that rents their residence is the new American Dream.

I'm a renter because:

1 - I own plenty of real estate an won't miss out on the upside of the market.

2 - I like redirecting cash towards vacations and creating memories.

3 - I love reducing my family's overhead expense and potential risks (water heater breaking, etc.)

4 - Renting gives us the flexibility to work in another country for a few years, one of my goals.

Now it you're just getting started, I'd wouldn't recommend this. I think house-hacking or converting a small SFH from residence to rental is the ninja move of choice.

Why not just have the tenant call/pay for the locksmith to come out and open the door?  Doesn't seem like you should even need to be bothered with it.  I certainly wouldn't pay for this type of thing.

On another note, here's a tip to help avoid tenant lockouts....replace door handle locks with non-locking door handles so that the only way an entry door can be locked is with the use of the key in the deadbolt.  No way to lock yourself out with this setup.  That's what I did after the first time I had a tenant accidentally walk out of the house and close the locked door behind them with their keys still inside.  Since the change, it's never happened again.