All Forum Posts by: Joe Legions

I'm thinking about the 30 year, however the lower interest rate a 15 year mortgage offers means a bit more equity when it's time to sell. Right now 15 year rates appear to be about 1% less than a 30 year, and when running the numbers that can mean $5K less in interest paid over 3.5 years, even with the extra payment on a 30 year. I plan on having a decent fund set a side for repairs and vacancy periods.

Thanks. I would plan on including HOA's in the rent and likely be able to have $100-$200 off the top to set aside. After the 20% downpayment I would likely be able to set about 6 months mortgage aside for vacancy periods. The area I live in would also be the area I would like to buy in because it is a family friendly community with good schools, close amenities, and newer construction. Since I'm looking for a short-term investment, I'd like to go with newer construction to limit the structural repairs and appliance replacements.

Rentals are hard to come by in the area, but I've tracked several and they appear to be picked up within a month. Town-home rentals in the area go for between $1,300 - $1,600.

A fixer upper seems daunting as this is my first experience, but the idea of forced appreciation is much more appealing than hopeful appreciation. Thanks for the tip on HOA rental limitations. I'll have to look into that.

Hi everyone,

My name is Joe and I'm a newbie to real estate investing. As mentioned, I'm from the northwest suburbs of Chicago. I have always had an interest in getting started in real estate investing. As a current town-home owner, I have seen how fast my neighbors have rented out their homes. I'm considering putting a 20% down payment on a newer town-home in the area, obtaining a 15 year fixed rate mortgage, and renting it out. When running the numbers the expected rent would cover the mortgage (escrow included) and leave $100-$200 off the top to set aside for repairs/renovations. I'd like to keep this going for just 3-4 years, then sell. The thought being to turn a $30K downpayment into $70K in equity (Assuming a 2 - 2.5% appreciation rate). While this all sounds good in theory, I certainly realize their are no guarantees regarding lending, renters, buyers, and appreciation, not to mention unexpected fees like closing costs and realtors. My question is: Is the payoff worth the extra headaches and concern?