If utilities are included in the rent, then it would be reasonable to adjust the rent based on how many people will be occupying the unit.

Scenario 2- Continue renting for the next few years and save more money....hoping for a price adjustment in the market buy a 3 bedroom, live there, and still purchase rental property after 2 years keeping the 3 bedroom and either staying out or renting out that as well.  

Leverage is a double bladed sword, and many of these newer posters didn’t live through the 2008 recession.

2 sawzall blades will have you up and running . 

But situations do occur whereby if the Austin market adjusts, his company may relocate him.

Which is why every time you do a 1031 exchange your accountant files a form 8824 which takes the adjusted cost basis of your old property ( profit and depreciation) and carries it forward to the new property.

And calculator can be adjusted accordingly! 

I didn't factor in the extra money for selling costs of 1.5%, so I will go back and make that adjustment to my calculator.

We need to secure financing, and have talked to several lenders with varying options from ARMs to conventional mortgages. we've purchased several homes as primary residences, but this is our first investment property and I want to make sure we're not screwing up here.One loan we got a quote on was a 10 year balloon, 5 year fixed, with an adjustment after 5 years and then locked in again until year 10.

I'm curious what people knowledgeable of the area see in the market when adjusting for risk (growth, crime, etc..)