I am currently homeless....
As I posted earlier I bought a 3 bedroom house in July 2002. I had been working for about 1 year and I realized that decided that the next big step in my strategy for reaching my goal of a net worth of $2 million + the value of my home was to buy a house.
I am single, I knew I would live there for a certain amount of time, but I knew I would probably move out in 3-7 yrs for whatever reason so I wanted to make sure I could turn this into a profitable investment. I thought I could use this to my advantage.
So here was the strategy I took. I bought a 3-bedroom house with excellent rental potential - the only issue was the numbers didn't work out to be a very profitable investment. I figured I would buy it at current market conditions as best I could. Then I would live in it until the rental income numbers work out to a profitable investment.
I purchased this house for $160,000 and the going rate for this type of property at the time was roughly $1000/mo. However I needed it to be roughly $1200/mo till it made economic sense to rent it out.
Something that was beneficial that I didn't really anticipate was an additional drop in interest rates - I was able to refinance with no additional costs to reduce the required rental income for breakeven to $1150/mo.
So within the last 2 months it finally happened! I was able to rent my house out mid-july for $1200/mo. I just moved all my stuff at the end of July into a friend's house in which I a renting a room and am currently basically homeless but am loving it!
I am so happy with the results of this plan I feel like I should try and do it again. Unfortunately housing prices have gone up so much I am not sure its a good idea......
I am single, I knew I would live there for a certain amount of time, but I knew I would probably move out in 3-7 yrs for whatever reason so I wanted to make sure I could turn this into a profitable investment. I thought I could use this to my advantage.
So here was the strategy I took. I bought a 3-bedroom house with excellent rental potential - the only issue was the numbers didn't work out to be a very profitable investment. I figured I would buy it at current market conditions as best I could. Then I would live in it until the rental income numbers work out to a profitable investment.
I purchased this house for $160,000 and the going rate for this type of property at the time was roughly $1000/mo. However I needed it to be roughly $1200/mo till it made economic sense to rent it out.
Something that was beneficial that I didn't really anticipate was an additional drop in interest rates - I was able to refinance with no additional costs to reduce the required rental income for breakeven to $1150/mo.
So within the last 2 months it finally happened! I was able to rent my house out mid-july for $1200/mo. I just moved all my stuff at the end of July into a friend's house in which I a renting a room and am currently basically homeless but am loving it!
I am so happy with the results of this plan I feel like I should try and do it again. Unfortunately housing prices have gone up so much I am not sure its a good idea......
Comments (3)
DATE: 10:51 PM
Why don't you buy another housse and live in it and rent out two bedrooms while you are living there?
Posted by Anonymous | September 10, 2006 3:03 PM
DATE: 9:29 AM
Good question! To be honest that is what I am working right now. I have been searching for a house to buy and have made a couple offers but haven't been able to seal the deal yet. Expect an update soon about this though.
Posted by 2million | September 10, 2006 3:03 PM
DATE: 6:41 PM
i tried renting rooms and frankly it's a hassle unless everyone has their own bathroom. I rent out my house to a family to pay mortgage and I live in my converted garage i had to renovate with 14000.00. new plumbing was most expensive item. look for houses or possibly duplexes near elementary schools.
Posted by Anonymous | September 10, 2006 3:03 PM