Selecting Location to start buying rental property : Up and coming/vibrant city - OR College Town
I'm a recent graduate and have been working for 1yr. I want to get into real estate; a fine business to park and invest my income. Thus far I am renting but looking to purchase a house and start gaining equity.But what should my first investment be? I think the first step is very crucial.
My options:
1.) Get a duplex ideally. Owner occupied, rent the other half to see if I am cut for the landlord business. I have found duplexes ranging $115,000 - $130,000. Some are decent looking(from online pics), some not so decent looking. This will be in the Cedar Rapids, Iowa area...Rockwell Collins, Cargill, General mills, TransAmerica, Quaker, Schneider Electric, Dupont, Alliant Energy, several great companies around the area for the size of the city. I then also plan to get a much cheaper rental property <$80,000. Just to rent out.
2.) Get a split level. Owner occupied(live in the basement), rent the top half. This will play more like having a roommate or 2. The split levels are in much much better condition when considering $115,000-$130,000 price range. Seen a few @ open houses. Seeing that I will have to live there, it's nice to know they afford a great std of living, clean, no immediate repairs, etc.. Also in Cedar Rapids. I then also plan to get a much cheaper rental property <$80,000
3.) Get a property <$200,000 in a college town. University of Iowa. Great deal of medical students, hospitals, etc.. Owner occupied as I will live there and rent other rooms. The risk is higher but the tenants will be of higher quality. I will only be able to buy this 1 property unlike option 1 and 2 where I can buy 2 properties 1 owner occupied and 1 full rental.
In both cases I qualify to can get a 10/1 Arm for the owner occupied no downpayment and option to refinance to a 30% fixed in near future and 30% fixed for the rental property.
What do BP members think of my options? I have never bought a house before. First time for everything real estate. I just want opinions and advice. I am 25yrs, single at the moment and have no family that I need to consider in my decision. I think this weighs alot in the amount of risk I am willing to take. I work a fairly good job so my fixed income can support any decision I want to go with.
THANKS IN ADVANCE FOR YOUR OPINIONS!!