Buying My First Rental Property??
Hello. So I'm new to this site, this forum, and the world of real estate investing in general. But just from browsing the discussions here I definitely think I'm in the right place to get started.
I've been interested in purchasing a rental property for some time now and I feel like I'm finally ready to take the plunge. The house directly next door/attached to me(I live in a twin) is going on the market and I think what better opportunity to become a landlord! I have the convenience of being literally a few steps away in the event of an emergency, not to mention the added bonus of being able to choose my neighbors.
I'm just not certain what my best bet is going to be when it comes to securing financing. I have some money in savings but would rather not touch that unless I absolutely need to. I do have quite a bit of equity built up in my home however so thinking a HELOC or cash out refinance would be my best options to cover the down payment at least. I have 10 years left and $92k owed on a 15 year 3.375% conventional mortgage for my primary residence. According to Zillow my house is worth somewhere in the neighborhood of $190k. The house I'm looking to buy next door is estimated at $156k. I anticipate being able to rent it for around $1200 to $1300 per month.
What do you guys think I should do? Is it a bad idea to tap into my equity to purchase a rental property? Between a HELOC or a cash out refinance, which would make the most sense in my situation? Is there anything else that I'm not thinking about or considering that I should be? I'm open to any advice or suggestions you may have. Thanks!