Increasing Income Side Business- Feel Like It Isn't For Me...?

[Auckland Stubble]

I'm in a position where I'm late 20's, have a mortgage (I rent out the other room) and have a good solid career. Recently moved to a new job which pays me more, moving from 53k to 60k. I feel this is progressing well.

I've approached a mortgage broker about what my options are about borrowing for an investment property. He said my income is my limiting factor and that I'd need to increase this in order to have any chance of getting a loan. I see a long term future with the company I just joined and like the industry.

Friends who also own property and investment properties have said that I should think about starting a side business. I have an interest in cycling, hiking and the outdoors so they mentioned I could do some sort of side business revolving around that. Coaching, group tours, etc.

However, I really have no desire at all to do something like this. The reason I do these pursuits is to de stress and get away from it all and explore for a while. It takes the stresses of daily life away when I'm outdoors. I therefore don't think that doing a side business is really for me. I appreciate my downtime too and need it to recover and rejuvenate.

So what are my options? I don't have plans to be mega wealthy and would be happy being mortgage free and owning a few rental properties to support travel and working part time in later life. Should I just be patient, work my day job and pay back the mortgage and buy an investment property later in the future when I can? Having a spouse at some stage with double income and also increases in my salary over time would occur to fingers crossed. 

[SwordGuy]

Depends on the market you are investing in.   In my town, if you had a 50% gross income savings rate on that 60k salary, you could be buying your first rental after 15 to 18 months of savings, and cash flow the repairs over the next 6 to 12 months.

In other towns you wouldn't even get a 5% down payment in that timeframe.

[lakemom]

Do you claim the rental income from the bedroom on your taxes?  That will help with the gross income/debt ratio.  Also, if you buy an ongoing rental property (one with a tenant in place) with a 25-30% down payment the qualifying for a mortgage is easier.  Finally, rather than dealing with a local small institution you might want to look into some of the larger companies that specialize in rental properties.  If you are not already a member, biggerpockets.com is a great resource for anything and everything you want to know about rental properties and lots of things you didn't even know that you need to know.

[GrowingTheGreen]

Do you claim the rental income from the bedroom on your taxes?  That will help with the gross income/debt ratio.  Also, if you buy an ongoing rental property (one with a tenant in place) with a 25-30% down payment the qualifying for a mortgage is easier.  Finally, rather than dealing with a local small institution you might want to look into some of the larger companies that specialize in rental properties.  If you are not already a member, biggerpockets.com is a great resource for anything and everything you want to know about rental properties and lots of things you didn't even know that you need to know.

Excellent point on claiming your existing rental income.

If your heart and mind aren't vested in the idea of starting a side-gig, then don't even bother. You will find that motivation is hard to come by without a strong desire to succeed.

What PP said is regarding down payment is very important. If you have that and some lenders are saying no, then keep looking. Approach local banks and if one says no, then move on to another. A final option would be to find private lenders or hard money. Hard money typically carries a higher interest rate though. Bigger Pockets is definitely a good resource to use.