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Answers (5)
- gabepal
- Contributions:57
Why not? Do pigs fly?
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
@Veronica, it's 30% down for 75% of rental income to count in Qualifying Income. ..... Happy funding, Rudi
- Veronica Lawrence, "Veronica Sells"
- Contributions:14
Yes you can use rental income to add to any other income you may have. Traditionally its been about 75%. e.g. $1000 income $750 counts as additional income.
- Frank Allen, "Frank Allen"
- Contributions:87
Short answer is yes a percentage of rental income should be considered.
Longer answer is it doesn´t really make sense to put all the cash you have into an investment property that isn´t an ideal investment property. Where is the down payment for the eventual home coming from? Condos have additional fixed carrying costs and the potential for special assessments. The net income generated from a $100,000 condo would probably not even qualify you to buy that condo again. If you could leverage the money into units that have a positive cash flow where the units income helps you qualify it would be a better investment and hedge against inflation but not really get you closer to buying your home faster.
I am assuming that your current housing is being paid by someone else... scholarship or parents. If you could buy something now that you would be able to live in when you graduate and rent it in the meantime that might make some sense.
There may be some additional better and more creative options but I would need to know more specifics. Even if you are not in my area I will spend some time looking at your options in greater detail with you if you email me personally.
Longer answer is it doesn´t really make sense to put all the cash you have into an investment property that isn´t an ideal investment property. Where is the down payment for the eventual home coming from? Condos have additional fixed carrying costs and the potential for special assessments. The net income generated from a $100,000 condo would probably not even qualify you to buy that condo again. If you could leverage the money into units that have a positive cash flow where the units income helps you qualify it would be a better investment and hedge against inflation but not really get you closer to buying your home faster.
I am assuming that your current housing is being paid by someone else... scholarship or parents. If you could buy something now that you would be able to live in when you graduate and rent it in the meantime that might make some sense.
There may be some additional better and more creative options but I would need to know more specifics. Even if you are not in my area I will spend some time looking at your options in greater detail with you if you email me personally.
- John Stewart, "nwhome.us"
- Contributions:2161
Income is income; whether it is from selling widgets, rental, salaried or hourly. I think that what the lenders want to see is consistancy and predictability (HA!). A history of succesful property management (taking care of a rental without much vacancy) is a pretty good history to demonstrate. You'll also learn some people skills...
Is real estate going to bring a better financial return than a CD? I thiink that a finacial adviser would suggest diversifyiing your portfolio out of the CD, but probably not to put it all into real estate. Depending on your age they will suggest varying degrees of risk. RE is risky, which is why I wouldn't count it out if you are young.
The future value in the RE investment will be in adding physical value to the specific piece of property. Can you upgrade the kitchen or bath, keeping the surrounding properties in mind, and add value over a 4-5 year period?
Your time-frame is short but almost reasonable. All cash eliminates the expense of interest so you have a little advantage.
There are 2 calculations that you can make: ROI and IROR. Let's see who comes up with the formulas.
Is real estate going to bring a better financial return than a CD? I thiink that a finacial adviser would suggest diversifyiing your portfolio out of the CD, but probably not to put it all into real estate. Depending on your age they will suggest varying degrees of risk. RE is risky, which is why I wouldn't count it out if you are young.
The future value in the RE investment will be in adding physical value to the specific piece of property. Can you upgrade the kitchen or bath, keeping the surrounding properties in mind, and add value over a 4-5 year period?
Your time-frame is short but almost reasonable. All cash eliminates the expense of interest so you have a little advantage.
There are 2 calculations that you can make: ROI and IROR. Let's see who comes up with the formulas.
Can rental income be used as reported income for a future home loan?
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