I'd like to open a discussion regarding a rental properties in general, and in specific, a rental property my wife and I are looking to invest in.
A little bit about ourselves:
- We are a married couple and are both 24 years old
- Currently renting and do not own any real estate
- Both employed and happy with our area and careers
- Monthly take home pay is $5,200 guaranteed... I could make more on commissions but we dont count that into our budget
- I can receive a 10%-20% bonus at year's end if I meet sales goals. We don't count this into our budget.
Assets:
- Investments (401k's, Roth IRA, HSA): ~$25,000
- Emergency Savings (normal savings account): $10,000
- Future home down payment savings (high yield savings account): ~$20,000
- Checking: This fluctuates between $1,000 and $2,500 but is never below $500.
Debts:
- $11,000 car loan (receive $500 expense per month for this car from company)
- $3,000 student debt
Net Worth: ~$40,000
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We currently rent in a moderate cost of living area for $1,200/month. We've always wanted to own a rental property in the future to provide passive income, and a good deal on a house has come up. It is a 3br/2bath house 2 miles away from where we currently live. The asking price is $200,000. I would obviously have an inspection before purchase, but there doesn't seem to be any glaring problems with the house. My question here is should we look into this house to turn into a rental property? Or is this foolish in our current situation to become landlords while still renting?
We are decently conservative with our finances, and put an emphasis on saving. Our goal before this rental idea came up was to buy a house in our area in the next 2 years for ourselves to live in, which would cost around $290,000-$320,000. Having a rental property would possibly put this on hold for a year or so but it sounds like something we would both enjoy as my work from home job is flexible and I could do the yard-work and some of the house repairs. We live in a desirable part of a growing city, and don't think it would be much of a hassle to find renters for this property.
Please let me know what you all think! Thanks