Bought my first home in 2006 with the intention of renting it after several years of living in it and building my nest egg back up. Paid 141,000 for a single family 1690 sqft three bed two bath in a nice subdivision. I did a 80/10/10 to avoid PMI. Spent five years living in that home making it a nice place for my wife and I to live. We finally took the plunge this past December and bought another home and turned our primary into the rental with the intention of doing the same thing to our new home in another year. We were picky on our tenants and couldn't ask for better people to have renting from us. After PITI we net about $250 a month. I'm in the process of refinancing right now to a fifteen year note because the average on the two notes was 6.35% and I can trim 9 years off the mortgage and pay only 12 dollars more than I currently pay on my thirty year.
Lessons learned so far.
1. Don't go overboard on what you put in a home. Travertine tile and sile stone countertops were probably just a little over the top. Formica and ceramics going in the new one.
2. Have the home ready to rent and on the maket when you submit a offer on a new home. I lost two months of income from the house because there were a few projects that I need to finish before I would let anyone move in.
3. Fortune favors the bold. When I bought my first house I wanted to be out and on to my next one in two years. Five years later I was still there. I let my own fear and the media stun me into paralysis instead of looking at the numbers. This new home 1 to 1 1/2 years tops. Besides money is just to cheap to pass up right now.