Put a Contract on Property #4

I had no plans to expand our rentals, but market conditions have drove us to action. A property went up for sale in the same neighborhood (with nearly identical characteristics) as our 1st property that we currently have been renting out for about 5 years. Given this is a strong rental area (close proximity to a university) and the asking price was not too far off from what the asking price was on the property I bought back in 2002, my wife and I put in an offer inline with what we paid for rental #1. Turns out we reach an unexpected agreement to buy the house after the seller quickly accepted our offer inline with our 2002 purchase.

While not even looking for this type of investment opportunity, it hit us in the face and we were able to react pretty quickly given our current available cash. It was anticipating an unplanned opportunity such as this that had me hold off from committing more of our cash to further paying down our mortgages. Good thing I did.

Stay tuned for updates on our progress with moving ahead with this contract.

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Comments (4)

Congrats! That's really exciting! Even though we're in our early 20's I wish we had more money saved up to make those kinds of moves. We bought a town home last year that we are living in it right now, but within the next two years we will be renting it out. I look forward to reading more about your new property! :)

Posted by Elisabeth | July 29, 2011 2:06 PM

Congrats! I have a question for you. Do you pay a much higher mortgage rate for a rental property? I am considering to purchase a rental property, and so far the mortgage rate is 1.5 - 1.75% higher. Does that sound right? Thanks in advance.

Posted by J | July 30, 2011 3:50 AM

J, that seems about right for an investment property from what I've seen. Just so you know, if you're purchasing a second home for yourself, it'll be more in the 0.5 - 1.0% range. Again, this is from personal experience.

Posted by Mark | August 1, 2011 11:52 AM

It is estimated that by 2015 home ownership will drop to the level that it was towards the end of the 1960′s. In this time 10,000,000 homeowners will become real estate renters. Seems like its only going to get better for the rental market?

Posted by Andy Weissman | August 8, 2011 9:22 AM