Home Buying in 07054>Question Details

Ferdinand Pa…, Home Buyer in Irvine, CA

Buying a property to live in for 2 years, then to rent it out.

Asked by Ferdinand Pardede, Irvine, CA Wed Aug 22, 2012

Hello,

My wive and I work in downtown NYC, have no kids, live in Jersey City, and are looking to buy a property in suburban NJ (within 30 mins drive from NYC) with price range of 300K - 500K.

There is a possibility for us to move out of the NJ/NY area in 2014. We are thinking of buying a house now because the prices and interest rates are low. If/when we move, we are thinking of renting out the place.

My questions are:
- Is this a good plan?
- What kind of properties should we buy: condo, townhouse, single family?
- How easy is to rent a single family house compared to condo/townhouse?

Help the community by answering this question:

Answers

9
I would say that buying a home now if you are relatively certain that you will be moving in two years would NOT be a good idea. Owning a rental property that is out of state from the new location you are in is more difficult than it may sound. You would have to rely on a local realtor to help you manage the property and that means you would have to pay out yet another monthly fee in addition to Taxes, Assoc. fees, Mortgage etc. You would be better served to rent now if it is "likely" that you will be transferred or otherwise moving out of State.
0 votes Thank Flag Link Mon Feb 25, 2013
FYI-We bought a townhouse in Florham Park. Very large and spacious by townhouse standards,(3bd,2/12 bath) a bus to NYC literally steps away and very nicely manicured and well maintained grounds, pool and tennis courts. Taxes are lower than in surrounding towns. We are having to move out of state soon b/c of company relocation. If you are still interested let in a townhouse let me know. There are many people here who own and rent out and they have never had a problem getting a tenant. Association fees aren't that bad. We've enjoyed the community very much.
0 votes Thank Flag Link Sun Jan 20, 2013
Hello Ferdinand
Your plan is is smart but success will depend on where you buy - you are trying to meet two needs - one is to serve your possible personal needs and the other is to find a desireable rental property that would allow you to cover your monthly costs of holding the property as well as maintainance and repairs going forward - you will have a better choice if you look at your higher budgeted number -
I work with clients from NYC who are doung the same thing- train line or bus commute is very important to value as are excellent school systems and more - taxes in NJ are varied depending on area and Association fees for community living factor in over taxes - many towns in northern NJ are being reassessed for value and tax rates right now - there are many suburban areas that can work for your idea but I would love to consult with you to find out more details to help you- I cover northern no in Morris-Bergen- Passaic and Essex counties - I am confident I can assist you to learn more about different areas - not just one town or county - if you are open to learn and serious- would love to meet you and your wife to discuss - call me any time - Lynda
0 votes Thank Flag Link Wed Aug 22, 2012
Between a single family home and a condo, my opinion would be to purchase whatever you feel would suit you and your wife the best and where you can see yourself living for an extended period of time just in case your relocation plans don't work out in 2014. You may want to purchase a home you will love because if you don't wind up moving out of state in the future, you may regret your purchase.

Keep in mind also, that condos may have monthly or annual maintenance fees and some may also have rental restrictions which may cause difficulty when ready to rent it out.
In my experience, and depending on area, single family homes seem to have a quicker turnover than condos.

So with this in mind, plenty of homeowners have accomplished what you are seeking to do, so your plans are do-able and possible if you are guided properly.

Seek the assistance of a Realtor to show you available homes in your desired area and budget, then choose wisely.

~Best with finding your Dream Home!~

Laquita Baez
Licensed Selling Realtor in NJ and GA
Weichert Realtors Summit
973.687.7095

~~Dream Homes ARE Within Reach!!!~~
0 votes Thank Flag Link Wed Aug 22, 2012
I like Suzanne's answer for you however, if it's a townhouse or condo you must factor in increases in association fees over time. Taxes will no doubt increase no matter where you are. A lot depends upon how far you are from the rental to oversee it. You might need to hire a property manager (figure 5-10%) if you cannot resolve ownership repair and maintenance issues. I think that if you were to own/live in the property, it would give you time to develop an infrastructure. In other words, have your realtor ready, have your list of trusted contractors and a friend who has the key in an extreme emergency. It's difficult to manage property long-distance. I own two investment properties and I live only 15 minutes from them. I'm there almost daily. Whoever called this "passive" income? Still, it can be profitable. Keep in mind you make your money WHEN YOU BUY. Buy well now. Don't buy thinking you'll make a profit when you sell- that's bonus.

As I mentioned, I do have my own rental properties. Let me know if I can help guide you in any way.
Leni
973-207-9803
0 votes Thank Flag Link Wed Aug 22, 2012
It depends .....
Nobody really knows what the market will be in a few years from now. A way to protect yourself is to put enough down so that there will be a positive cash flow, where the rent covers your expenses.
From personal experience, I would recommend a townhouse. I would get a home warranty so that if an appliance, air conditioner, etc. goes bad you have someone to call. The condo association will take care of the exterior.
Please contact me and we could review your options.

Thanks,
Pete
201 247 9568
ppantelis@weichert.com
0 votes Thank Flag Link Wed Aug 22, 2012
It is an EXCELLENT plan! And your price range should give you lots of options. My experience with rentals would suggest that single family homes or townhomes are easiest to rent. The advantage a single family home has over a townhome is that there is generally no association fee to pay on a single family home. And, since there are fewer expenses, your profit is increased. I think both are equally easy to rent, I am finding my rental properties, both townhouses and single family homes, are currently only on the market for 30 - 45 days before we find a good tenant.

Typically, the owner/landlord pays the property taxes and association dues, if any. The tenant on these types of properties, pays all the utilities and is responsible for lawn maintenance, snow removal and so on unless those items are included in the association fees. So, both are excellent choices, but you will encounter tenants with different lifestyles depending on which property type you choose.

Good plan! If I can be of help to you at all, please feel free to contact me. I am experienced in both residential purchases and rentals, so I can help you now and again two years from now when you are looking for a tenant. I live and work in Morris County. The Morristown area, which includes Chatham, Madison and Morris Plains, are EXCELLENT areas for rentals. We have commuter train stations in each of these towns which makes it very, very attractive for commuters. If you don't want to come this far west, you might want to think about Montclair or Summit. I am familiar with both of those areas as well.
0 votes Thank Flag Link Wed Aug 22, 2012
Ferdinand... Seems that many people feel like you. Our team was asked the sane question twice this month! Best bet for you will be a townhome. I highly recommend Livingsto which has amazing schools, now has a new jitney service to south orange train or direct buses to NYC. The regency club are very desirable and rent for about 3400/month. 2 bedrooms are in the upper 400's. 3 bedrooms in the 500's. Even when they are for sale they go fast but the rentals fly off the market! It's a gated community with club house, pool and tennis courts.
The reason I recommend a townhome is that when you leave in 2-4 years you can rent amd not worry about the exterior, maintenance or the roof. All those are included!

There are other communities in northern nj that can work. We would love to meet for a free buyers needs analysis and discuss the various options!

Sharon and karen
201-738-3158 / 917-294-0356
Sharonandkaren@kw.com
0 votes Thank Flag Link Wed Aug 22, 2012
Hi Ferdinand

I agree with your train of thought. i would recommend a Town home or condo vs a house if you are planing on renting in a few years. Houses for rent are always in demand but the upkeep of the exterior is an extra concern when you are not around

I think Bergen county or Montclair, Nutley are great places to live and in the future will be very easy to rent. If you would like to meet me in my office for a free buyers consultation we can go over all your options and make sure all your needs are met.
0 votes Thank Flag Link Wed Aug 22, 2012
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