Buying right is the first place you make your money in real estate, the second place is cosmetic improvements that cost less than 10% of the purchase price, so 200 thousand dollar property you would try to limit the improvements to 20 thousand or less. The third place you make you money is killing the debt....amortization or the reduction of principle over time. And lastly you make money with appreciation.
Here is the rub, most people look at appreciation as the main way to make money but that is the last way you make money and that's the bonus money.
I manage lots of propertes in the greater Portland area and I see investors working very hard to buy right and they are buying. So the next question is do you have a substantial down payment to invest and is it enough to make your investment cash flow. One thing I see people have success with is buying a duplex and living in one side and renting the other for the first 2 years and then renting the second side. They have someone else paying down the mortgage to reduce the principle on the loan. To do this you might consider building a team from Realtor to lender to service providers like CPAs and contractors. Good luck in your future investment.
I use to live in Portland and have a rental. Your post was a few months ago, not sure if your still thinking about it, but would be happy to answer any questions you might have. If you post a response, it will email me and I'll come back to this forum and answer. Good luck!
Janeese Jackson, Principal Broker
"your" Real Estate Resource
Property ownership has historically been supported by benefit to the homeowner through our tax system so I agree with Dune that you will come out ahead if you buy. If you are a first time homebuyer, and you buy this year, you will be able to take advantage of the tax credit...basically free money for you if you close before December 1 2009. After 2 years, you can turn your home into an investment property (which is already is) and rent it out. Any "headaches" that come along with being a landlord can be mitigated by hiring a property manager, or by just doing careful screening of your renter and being very specific about your expectations. The type of property you buy, be it mulit family or single family, will depend on your borrowing ability, your financial situation, and carefully constructing a plan that works for you. Be sure you record all of your projected expenses, a realistic potential income and analyze your potential benefit as part of building your plan as you look at potential property to buy. This is a great time to buy real estate because of the amount of inventory and the low interest rates, but only if it works for you in a well thought out plan for your specific situation.
I hope this is helpful!
Karla Divine, Broker
Divine NW Realty
That's a tough one... This is my advice: Buy something at a steep discount... If you find a deal, then it would be way worth it. A foreclosure can be bought at 25% or more under market. You can check out deals on PortlandHomeAuction.com. There is an "auction alert" that will instantly send you any new deals.
2. Sell it for enough to break even and have a Few Thousand to take with you, either way you end up living rent free for two years.
It would all depend IMO on getting something in a consistently desirable area to live/rent at a Price low enough that the Average Rent is higher than your payments.
RE/MAX Equity Group Inc
ABR,CRS, EA S.T.A.R eco-broker
The best case scenario for a rental property would be to purchase a place that you will be able to rent for the PITI, utilities, and property manager fees. The other piece to consider is whether or not you will have access to reserves for needed repairs and periods of vacancy. You can claim some of the rent you'll receive as income to help you qualify for another loan if you'd like to purchase in your new town as well. Income to debt ratios will apply so you may want to look at that, as welI, if you are wanting to purchase another home in the city you may move to.
It is definitely worth looking into and penciling out on paper! Way to have an entrepreneurial spirit!