New to REI from Massachusetts

7 Replies

Greetings!

My name is Scott and I live on the North Shore of Boston, MA. I'm fairly new to real estate investing as I have been renting out a single-family house for about 1.5 years. I'm in my mid-30's, work full time as an engineer, and I am married with 4 kids.

My goal right now is just to learn how to play the real estate "game", and try to figure out which deals make the most sense to me and my family. I would like to buy a vacation home that I can also earn $$ with as rental property. I also have a big mortgage decision to make on my current rental property, which I may end up selling in a couple of years.

Hopefully, I can learn quickly and find the answers with the help of the experts in this forum.

Scott

Despite your inexperience, you're ahead of many of the people here. How is operating your rental property going? Have you learned a lot being a landlord?

The "Game" can be learned and you're at the place to do it! Good luck with you real estate.

What kind of engineer are you, BTW?

Thanks for the reply, ToneyJ.

Regarding my rental property, I really lucked out with my tenants. They are a family of 4 whom I have known previously. They are very responsible (so far) and have taken care of the property like it was their own. Although this is a great situation, it has not taught me much about being a landlord. Sometimes I even forget I am a landlord until the rent check arrives :D .

My tenants plan to rent from me for 2 more years, but I am at a point where I either need to sell or remortgage. I am at the end of the 3rd year of a 3/1 ARM, and my interest rate will increase from 4.125% to 6.125%. The best 3/1 ARM's I can currently get are around 6% APR, so it looks like I'm stuck for this year.

I don't know if it would be in my best interest to sell the property in 2 years and buy an investment property with a higher return or keep the property, continue renting, and use the equity to mortgage a new investment property. I'm also thinking about looking for vacation/income property in FL because my kids like going to Disney.

Again, thanks for your welcome, and I look forward to learning by reading the great advice that has been given to others in this forum.

Scott

PS: I'm an electrical engineer working in semiconductors.

Given how real estate prices have climbed steeply in Boston, your best time to sell would be now. If the real estate bubble does deflate a lot, then holding onto the property for a long time while renting it out to build equity seems like a sound plan. This is coming from a novice and there is a chance my assessment might be different from that of the experts.

Nice to meet you, Edge.

I would love to sell the property since I could probably find a better piece of investment property in the form of a multi-family house or vacation properties, but my current tenant is a friend and takes good care of the place, and wants to rent for 2 more years. The market is probably at near peak right now, so I would stand to make a good return right now. My tenant has also agreed to pay the increase in rent on their next contract, which will offset my increase in mortgage payment, just to stay in the house.

I have read that the housing market will decline nationally in 2009 or 2010, but I would like to see what the market trend is for the North Shore of Boston right now. Do you or anybody in this forum know where I can find this info?

Scott

Scotty, the market is already heading south here in California and is expected to further decline in 2006. In contrast Portland, Oregon is supposed to post a modest gain in 2006. An article in the Dec 26th edition of Fortune listed the median prices of homes across the whole country and predictions of future gains/losses. These prices were from mid 2005 but the article was excellent read. Check it out at http://money.cnn.com/magazines/fortune/fortune_archive/2005/12/26/8364648/index.htm (you may require a subscription)

To add to my previous post, here is a section from the Feb 20th, 2006 edition of Fortune.

[i]"A Tale of Two Markets Is the bubble finally bursting or is housing
still strong? Both. Half a decade into the biggest real estate
boom in our nation’s history—and a full two years after pundits
began warning of collapse—the endgame remains unclear. Here’s
what we can learn from a pair of high-profile hot spots, Orange
County and Boston. by Ellen Florian Kratz (page 18)"[/i]

I figured you might be interested since the article covers Boston.

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