I have a question in regards to the 50% Rule
First Post!
So i've been lurking around on the forums for awhile, and listening to the podcasts on and off for the last few month. I have a question regarding the 50% rule.
I am looking to buy my first investment home in January. For my first home, i'd like to stay conservative and stick to a nice/decent area (move-in ready for the most part) and purchase a single-family home.
In the areas I am looking at, a single-family home runs at around $150,000. Rent usually tends to stay around $1300/$1400. I've been crunching the numbers, and I haven't been able to generate a positive monthly cash flow with a 20% down payment. I really would like to stick to a 20% down payment. (I'm not comfortable dropping <$30k on my first investment property)
Example:
$142,000 home
Down Payment $28,400 (20%)
Rent $1395
Mortgage $734 (20% down with an online mortgage calculator)
$1395/2= $697
$697-$734= (-$37.00)/month
Is 50% towards expenses generally "high"? Is rent too low for the price point on the house? Should I go out of my comfort zone, and go into a lower income area (I don't want to do this for my first investment home), or am I doing the math completely wrong (lol)?
Any insight would be greatly appreciated!