Hi everyone, I’m an engineer in the Houston, TX area looking to purchase my first house/start investing in real estate.
I’ve been researching the different strategies presented here, listening to podcasts, reading books, talking to other investors (mostly people at work with a handful of units).
I currently have about 50k liquid to put into a place and am thinking that the best strategy to start out may be to house hack in order to reduce my current rental expenses, start building equity, and have a SFH to rent out in a couple years after I move on.
My main dilemma is deciding between an inexpensive suburban house in Spring (close to work) where I can put 20% down, vs. a much more expensive house “inside the loop” where I likely put 5% down.
Also, I currently rent a 2BR apartment with a roommate inside the loop, for about 1200/mo each. If I purchase something by the end of the year my company will also pay closing costs (part of a relocation benefit).
Here’s my breakdown of the 2 options:
Suburbs:
My target is an older area proximal to work with a new high school in the good school district (Conroe). 200k or less. There is a lot of new development just south and plenty of room to expand east.
Pros:
Put 20% down
Total monthly pmts not dissimilar to current rents
Give current roommate a great deal (~500/mo) to rent a room (we work at the same company)
Possibly look at getting another roommate (would likely only work if I could find a 3/3 - most are 3/2)
Would likely be a great long-term rental because it’s at the low end of the price range for the good school district.
My commute to work is drastically reduced.
Cons:
Appreciation may be limited by the large developments. (Or the opposite??)
I’m away from the city center for entertainment/friends.
Wouldn’t want to live there long term since my fiancé will work downtown in ~1yr and the non-reverse commute would be terrible.
Inside the Loop:
My target would be close to where I currently live. Property has appreciated drastically in the last 5-10 years and houses are often 300+ per sq ft. Mostly townhomes (bungalos are out of my price range).
Pros:
I could potentially live there for quite a while.
May experience more appreciation (also more downside risk).
Can charge roommates more.
Could potentially Airbnb room(s)
Way more fun of an area
Cons:
Much higher expense obligations & losing money to PMI
Biggest limiting factor for roommates is parking (also we all drive trucks :P)
I have flip-flopped between these two strategies for a little while, and since I’m getting close to crunch time to make a decision, I’m wondering what the community thinks!
Thank you for your reply,
Wynn
