Newbie Live-in Property Question
BP Members,
I am in the process of closing on a property that will allow me to change my living situation and save a good chunk of money. I am looking for your opinions on the next step.
Some background information:
- Currently renting a 1/1 for $1300 (long story, don't ask lol)
- Purchasing a 3/1 with a detached 1/1 with conventional financing (4.3% rate at 5% down )
- Monthly Payment will be $1250. Tenant exists in detached 1/1 will be paying $550.
- PMI is around $70. Lender stipulates that I live in the place for 1 year minimum.
I plan to live in the 3/1 for a while, take care of any maintenance items and make some cosmetic updates, and eventually rent it out. Conservative projected rent for the 3/1 is $1150.
My question is what should be my next major step in the coming 1-2 years? Here are some scenarios that I can think of:
1) Use the extra money from the rent to get to 20% equity and eliminate PMI. But then what?
2) Don't make any extra mortgage payments, but save for a down payment on another property, then rent out the 3/1 and buy another property with owner occupied financing (after 1 year).
3) Focus on aggressively paying off the mortgage as quickly as possible by renting out the 3/1 and living in the 1/1.
What do you guys think? Any other ideas?
For the record, I live by myself and have a great job, so I can afford to "house hack" and move around easily. I can also easily afford another 5% down payment on another property within a year.
Thanks,
FF