Houston, TX · Member since 2019 · 26 posts · 2 votes
So i have recently gotten pre-qualified for a mortgage as i am looking into dipping my toes in the REI. I am looking for SFH as there's currently not any good multis that are available in the area im looking for in Houston, TX.(Greater heights, Missouri city, sugarland, spring, etc) I want to know if i want to simply buy the house for myself as a primary residence, which then eventually rent out once i move out in however many years. When it comes to analyzing deals, do i treat myself as the "tenant" and factor in my mortgage as rent to calculate deals?
Investor · Houston, TX · Member since 2018 · 16 posts · 4 votes
7y
@Brian Cheng Hey Brian! Congrats on taking the first step in your investing career. You’d want to consider what you could rent the property out for once you moved out. And, run your analysis the way you typically do for any straight rental property. You want to be sure the cash flow is positive & ensure it meets your own personal return hurdles.
There are templates on bigger pockets you can use. You might also consider Eado or north side if you’re looking for a multi property. You could probably find something you could rent out the extra units to help cover or partially offset the mortgage. Good luck!
Investor · Houston, TX · Member since 2018 · 16 posts · 4 votes
7y
@Brian Cheng Hey Brian! Congrats on taking the first step in your investing career. You’d want to consider what you could rent the property out for once you moved out. And, run your analysis the way you typically do for any straight rental property. You want to be sure the cash flow is positive & ensure it meets your own personal return hurdles.
There are templates on bigger pockets you can use. You might also consider Eado or north side if you’re looking for a multi property. You could probably find something you could rent out the extra units to help cover or partially offset the mortgage. Good luck!
I agree with Sarah. Treat yourself as a tenant in your calculations.
What’s really important is not what your mortgage is necessarily but what the market rental rate for the home is. If your mortgage is $1,500 but rental rates in the area are $1,300, it won’t make a good rental unless you’re only looking for appreciation and not cash flow. What’s going to impact whether it has positive cash flow or not is how big of a down payment you put down if you’re going conventional to get your monthly payment as low as possible to make it cash flow once it’s a rental. If you’re putting less than 20% down chances are it won’t cash flow after you rent it out unless it’s a property in a zip code with high rents compared to lower values. The neighborhoods you mentioned aren’t known for having low values (cheap houses) and high rents. They’ll likely be at 1% or less of your property value in those areas - i.e if the house is worth $250k you likely aren’t going to be able to get $2,500 per month for it.
Be sure you talk to a realtor before you make any decisions to get rental rates on a particular property for sale you want to buy and rent out down the road. Obviously the market can change drastically in two years, but it’s still valuable info.
Houston, TX · Member since 2019 · 26 posts · 2 votes
7y
Thank you for the great advice! Any specific areas in houston market in your opinion would be a good place to look into? i travel quite often for work, and due to the nature of my work i don't have to be in any specific part of town. C
loser to Houston city would be better but not for work purposes but rather just my personal preference. the neighborhoods i mentioned i am looking into are based on the school districts. I would like to invest in a property in a decent and safe area so it will rent quick once i move.