1. If I want to purchase a house for $100k as an investment property to be rented out, and I have the cash to buy it outright, is it not the best idea to purchase it outright? My other option is to put 20% down and get a 30-year loan for $80k while investing the $80k cash that I didn't put into the house.
I guess this sorta comes down to the "Pay off mortgage or invest" argument, right? Is this different considering it's a rental property?
2. I have a house in Chicago that I eventually want to move back into. I'm overseas for another year, but for the last year I've been renting it out successfully.
(15yr)Mortgage+Insurance+taxes = -$1840
Rent = +$2050
Prop. Management = -$205
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I basically break even and it covers my 15yr mortgage. This pays off about $800 of principal every month, so I see it as a big win. I understand that a lot of people in my situation wouldn't be happy with this, but I'm unsure why. The above numbers don't include maintenance from things breaking (furnace would cost a lot, damaged items, etc) but I can't imagine it would be more than $800/month. What's the counter argument?
3. I'll be coming back from overseas with a large amount of cash (likely ~$150k) and was planning on putting it all towards VTSAX in my taxable account through Vanguard. Since my current house is renting well, I'm considering when I get back to the states purchasing a cheap (~$80k) single family house in the less expensive neighboring town (a few miles from my other home) and living there with my wife while we fix it up (while continuing to rent out our original home and covering that mortgage). The goal would be after 6 months renting it out through our PM again and possibly repeating the process. I could do most of the DIY projects and she can paint and do some of the smaller projects. Any flaws in this plan? It seem that in the area we're looking there are a lot of opportunities that pass the 1% test.
I'm just starting to read articles/forums on investment properties at BiggerPockets, but thought I'd post my initial questions here.
-Ryan
