I think you misread me - I said it's "sometimes" even worse to rent a place out. If it's making the 1%/50% rules, it's probably worth renting. If not, it's probably not. My point was just that hanging onto a house because you just bought it is not *always* the best move.
Sorry if that was confusing. My point was just that if you think there is a high probability that you'll use it as a rental property, you should evaluate it as such.
-W
I guess that's all off topic, just trying to figure out what the background situation is for you. While it's true that turning around and selling a house right away is a waste of money in most cases, renting it out is sometimes even worse - just a slower way to lose the same $.
Sorry I missed your post. How do you mean renting out most places is a way to throw money down the drain? It's nearly 10K a year between principal pay down and cashflow, not to mention the appreciation, etc. I really like the area, it is a really nice area, walkable to everything except work. I won't live in it forever. Eventually I will sell one of my paid off rentals and use the money to retire into the sticks, then use 2 mortgaged low interest rentals to pay for my retirement. Cash in index funds will be an alternate/backup plan/get multi millionaire rich backup plan that I can also tap if there are evictions, damages, etc.
Oh, I got ya. Yeah, that makes sense. It meets the 1% rule and then some (1.5%) and no, I am not making an appreciation play here. I only invest if it has $400 a month or more in positive cashflow. The principal paydown, the appreciation, the tax benefits, these are the sprinkles, caramel, and cherry on top.
There were four rentals, all similar to this one advertised on craigslist Friday. I contacted each of them to see how long they've been vacant while I was posing as a prospective tenant, but never heard back. Today all of the listings are GONE. My realtor told me that it will be a great rental market when I told him of the limited number of rentals. I thought it would be, but damn, I didn't believe it until today!
I spoke with the city inspector, he said it is not a can of worms at all, it will be either him or one other guy who comes out, and they are both easy going. Just submit a plan to build something like what is, and it will be good. If I choose, I can take it down. I would rather have both slots in the garage to park in, BUT...the utility room conversion, once permitted, looks like it will add 30K to the value of the house at $150+ per square foot.
Also spoke with a contractor and my insurance company. Contractor said it's not a big deal, and insurance company said they don't even care and are not worried about it. I think I am going to go for it!