Home Buying in 32092>Question Details

Richard, Home Buyer in Saint Augustine, FL

Better to invest in 1 larger or two smaller investment rental homes in World Golf, 210 or Ponte Vedra with 300K preapproval?

Asked by Richard, Saint Augustine, FL Sat Mar 6, 2010

I have about 100K saved toward one or two downpayments.. I am preapproved to up to 300K. I have 125K left on my primary home just appraised at 350K. Line of credit is 150K with zero used. I am looking for homes in the World Golf, Ponte Vedra or 210 communities where there are good schools. Am I better to get 2 homes in the lower to mid 100,000's or 1 good deal in the mid 200's 2500-3300 sq ft. considering appreciation rental, etc.? If I buy the 200's home, can I take a fixed home equity on an investment and pay off my primary residence? I heard a good 3/2, small 4/2 can get 1100-1400/mo. A good 4 or 5 bed gets 1800-2100 in these areas. The question is the appreciation and potential payoff on my primary if I can do that. Other considerations is having to rent two over one, being able to rent both, etc. I have a good idea which communities are in the price ranges I am looking at.

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I believe one thing you need to ask yourself is how much of a landlord you want to be. Once you answer that question, then depending on what you can buy the two houses for versus the one, and the rent that will collected on two versus one. That should help your decision. If you had two houses, one might stay rented longer than the other, so you might have income coming in while your rent the other. You might also be able to find renters at the lower price point. I believe there are pros and cons to each scenario.
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1 vote Thank Flag Link Tue Mar 16, 2010
No cash out on investors but you do not need it. Just do not put as much down at purchase and apply the remainder to your primary. Minimum down payment on an investor SFR will be 20%.
You will probaly get more income from 2 homes than one large one, but this is just speculation without seeing actual properties, I put a 3400/sq ft WGV on the rental market and was lucky to get $1700/mo. I had no serious responses until I dropped my asking price from $2K.

Be careful about CDD fees in this area and ask about HOA delinquencies. These fees, and fee increases to make up for non-paying homes, can eat into your monthly cash flow.
0 votes Thank Flag Link Thu Apr 22, 2010
investment means one thing and only one thing...CASH FLOW...

if your rent does not pay the bills and you also it is a bad investment. If the property goes up in value that is a bonus, not a goal.

You need to learn a lot more about investing in real estate (so do I) and learn about ROI, cap rates and more. Expect one month every year per unit to have a vacancy. If the numbers work it could be a good investment either way. If you lose money renting it is a bad investment period. The renters pay the bills and you or it is a bad idea.
0 votes Thank Flag Link Tue Mar 16, 2010
Richard, I am not a mortgage person, but I would be surprised if you could get a home equity on an investment property to pay off your primary residence loan.

As you probably know, the schools are very good in all the areas you mentioned. You could go either way of having 2 less expensive investments or 1 more expensive. There are some great values in our area right now. I think the best potential is to find a home in a community that you believe in. I think that might mean going with one property in the 200,000 to 300,000 range. The community you pick is very important to your investment retaining its value. We have a property management company also that could clarify the rents you discussed. If I can be of assistance please contact me at sdavidson@davidsonrealtyinc.com
0 votes Thank Flag Link Sat Mar 6, 2010
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