How exactly do I decide what I should buy as my first piece of property with an FHA approved loan? I live in Boston, MA and am looking to buy an apartment to rent out and then resell later in the future.
FHA loans are owner occupied loans, so if your intent is to rent out, you can't use FHA. Conversely, if you use FHA, you have to owner occupy.
Yes, if you are looking for the investment you could use conventional financing which will require you to put 20% down.
In terms of what to buy, you have to think about what your goals are as an investor and what you would like to get out of this investment. Are you looking for positive cash flow each month? Are you buying it in the hopes of it appreciating and you having the ability to sell in the future for profit? Once you decide these things you can start thinking about the type of property to pursue.
Have you thought about looking at a duplex, where you could live in one side and rent the other in hopes of you living for free or nearly free now. Then in the future you can hold on to it and earn positive cash flow. Plus, if you live in it then you can use an FHA loan to purchase it and put down much less than 20%.
If you want to buy something to sell later, just be careful that you don't buy something that you can't force any appreciation with. If there's nothing you can do to make it better and worth more, then you are left having to rely on the housing market to rise and you have little to no control over that.
If you buy a property that you can get under market value and do some updates to it and sell in the future, there's a better chance that you can make some money when you sell and you have a little more control.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing