Buying cheap real estate in rural communities as first property
Member since 2019 · 2 posts · 1 vote
Hi all,
This is my first posting here, go easy ;)
I'm 21, a Computer Science dropout. I am making $60/hr as a 1099 infrastructure engineer. I might convert my hourly rate to a 90k/year salary as a w-2 employee shortly. I work remotely, but I live in Corvallis, OR, where I was going to school. I want to figure out an investment plan, whether that is to snowball my way into real estate or to invest in high-growth mutual funds. I'm not sure yet.
The cost of living in Corvallis is pretty high. I have a 2 bedroom apartment at $1064/mo (with the second bedroom as an office to write off as a business expense). I want to lower that as much as I can so I can direct ~70% of my take-home pay into investments. I could do real estate, which would take more learning but provide passive income if I'm smart about it, or I could play the safe route and put everything into mutual funds and retire early when the market goes up over the next 20 years. I'd have around $5k/mo cash coming as salary, with hourly it depends; its usually around 10k pre-tax.
I want to save as much as possible, so that would mean reducing my monthly expenses. I come from an area in Oregon where a decent house without major repairs could come around 100-120k, but a fixer-upper could be maybe $50k if I snag a good deal (I think? I'm really new to this). The rent in these areas is around 800-1200 for a 3bd 1ba house.
I'm really contemplating buying a $50k fixer-upper in the area to lower my costs. I figure I could pay off a house like that in 4 years if I bum rush it, which my income could allow me to do (I'm cheap). By 25 years old, I could save for a down payment and closing costs within 6 months for a decent rental (assuming I save 4k/mo on salary).
My worry about this is I would live in a rural area with lower rent prices and low family income, meaning I might have to spend extra in repairs and a decent chunk of the cash flow would go towards paying for repairs. But, I think this would be the best way to supercharge my savings rates to allow me to take more risk without going under if something goes wrong.
Do you guys invest in LCOL/ low rent areas? Is it ever worth it? The towns I'm looking at don't usually appreciate much because there is no development in the area. They of course do appreciate, but I think most of the ROI would come from rental cash flow.
My biggest holdup is if I stay where I am, I won't be able to buy at a very fast rate, and the market is very competitive because Corvallis has the only 'good' tech/engineering programs in the state, and is growing fairly quickly.
This is my first posting here, go easy ;)
I'm 21, a Computer Science dropout. I am making $60/hr as a 1099 infrastructure engineer. I might convert my hourly rate to a 90k/year salary as a w-2 employee shortly. I work remotely, but I live in Corvallis, OR, where I was going to school. I want to figure out an investment plan, whether that is to snowball my way into real estate or to invest in high-growth mutual funds. I'm not sure yet.
The cost of living in Corvallis is pretty high. I have a 2 bedroom apartment at $1064/mo (with the second bedroom as an office to write off as a business expense). I want to lower that as much as I can so I can direct ~70% of my take-home pay into investments. I could do real estate, which would take more learning but provide passive income if I'm smart about it, or I could play the safe route and put everything into mutual funds and retire early when the market goes up over the next 20 years. I'd have around $5k/mo cash coming as salary, with hourly it depends; its usually around 10k pre-tax.
I want to save as much as possible, so that would mean reducing my monthly expenses. I come from an area in Oregon where a decent house without major repairs could come around 100-120k, but a fixer-upper could be maybe $50k if I snag a good deal (I think? I'm really new to this). The rent in these areas is around 800-1200 for a 3bd 1ba house.
I'm really contemplating buying a $50k fixer-upper in the area to lower my costs. I figure I could pay off a house like that in 4 years if I bum rush it, which my income could allow me to do (I'm cheap). By 25 years old, I could save for a down payment and closing costs within 6 months for a decent rental (assuming I save 4k/mo on salary).
My worry about this is I would live in a rural area with lower rent prices and low family income, meaning I might have to spend extra in repairs and a decent chunk of the cash flow would go towards paying for repairs. But, I think this would be the best way to supercharge my savings rates to allow me to take more risk without going under if something goes wrong.
Do you guys invest in LCOL/ low rent areas? Is it ever worth it? The towns I'm looking at don't usually appreciate much because there is no development in the area. They of course do appreciate, but I think most of the ROI would come from rental cash flow.
My biggest holdup is if I stay where I am, I won't be able to buy at a very fast rate, and the market is very competitive because Corvallis has the only 'good' tech/engineering programs in the state, and is growing fairly quickly.