- Find a Real Estate Professional
- Realtors®
- Mortgage Lenders
- Home Improvement Pros
- Other Real Estate Services
- Review an Agent, Lender or Pro
- Marketing on Zillow
- Real Estate Agent Advertising
- Join the Professional Directory
- Popular
- Real Estate Market Reports
- More
Answers (10)
- Amy Mullen, "amyullenremax"
- Contributions:173
Riaz,
Yes, paying it down significantly would help. The idea being that you have to keep your debt-to-income ratios in an acceptable level in order to keep the attractive interest rates and preserve your buying power.
Your question prompted me to post this blog this morning about the costs of being of landlord: (http://amymullenremax.wordpress.com/2011/12/18/the-costs-of-renting-out-your-house/) there is a link for a worksheet you can download to calculate your costs that might be helpful in your decision making. Ultimately, pick a condo that is both affordable and in an area/complex that is attractive to renters. I know that's easier to say than to do!
Please let me know what you decide to do! This could be a very solid foundation for your financial future if done correctly!
Amy
Yes, paying it down significantly would help. The idea being that you have to keep your debt-to-income ratios in an acceptable level in order to keep the attractive interest rates and preserve your buying power.
Your question prompted me to post this blog this morning about the costs of being of landlord: (http://amymullenremax.wordpress.com/2011/12/18/the-costs-of-renting-out-your-house/) there is a link for a worksheet you can download to calculate your costs that might be helpful in your decision making. Ultimately, pick a condo that is both affordable and in an area/complex that is attractive to renters. I know that's easier to say than to do!
Please let me know what you decide to do! This could be a very solid foundation for your financial future if done correctly!
Amy
- Riaz Syed
- Contributions:10
Amy, thanks for your valuable insight about my question, I appreciate it does it help if I pay off the condo before I buy the SF home? My hope is that if I can pay off significantly, I'll have loan balance which will still bring me some net cash flow even if I have to move due to work and rent it out
- Amy Mullen, "amyullenremax"
- Contributions:173
Riaz,
The one thing I would caution is that even if the condo is rented out make sure your buying power for a second mortgage is still the same. Mortgage companies usually like to see a rental history of one year or greater before they will consider that mortgage partially covered.
Also, the interest rates may not be the same in 3 to 5 years.
And...make sure there are no deed restrictions on the condo that prevent you from renting it out.
A smart home purchase now will still result in a smart sale down the road. If you are looking at $200k condos then yes the mortgage is still very affordable with the current rates but you will also have the condo fee on top of it. If you applied the monthly condo fee towards the loan balance on a mortgage, would you still be in a good position to sell if you had to move on because of the job?
Just a thought...
Amy
The one thing I would caution is that even if the condo is rented out make sure your buying power for a second mortgage is still the same. Mortgage companies usually like to see a rental history of one year or greater before they will consider that mortgage partially covered.
Also, the interest rates may not be the same in 3 to 5 years.
And...make sure there are no deed restrictions on the condo that prevent you from renting it out.
A smart home purchase now will still result in a smart sale down the road. If you are looking at $200k condos then yes the mortgage is still very affordable with the current rates but you will also have the condo fee on top of it. If you applied the monthly condo fee towards the loan balance on a mortgage, would you still be in a good position to sell if you had to move on because of the job?
Just a thought...
Amy
- Riaz Syed
- Contributions:10
Nina, thanks for your reply, I completely agree with you that being landlord is not riskfree.
- Riaz Syed
- Contributions:10
Bert, thanks for your votes, appreciate your kindness. Yes you have a good point about the rising dues and/or getting stuck if I have to sell it. I am counting that my rental income over a period of 5-10 years would offset any other losses/depreciation/loss when having to sell etc.
I intend to pay off the mortgage in 2-4 years time. After that my situation may improve hopefully regarding rental income.
I intend to pay off the mortgage in 2-4 years time. After that my situation may improve hopefully regarding rental income.
- Bert Pope, "bertpope"
- Contributions:66
dues is the only killer in a condo. but if the rent can cover everything and bring you a decent return, you have my second vote.
- Riaz Syed
- Contributions:10
Thank you guys for taking the time to advise. Is a condo good investment in the long run if i keep it as rental property?
- Bert Pope, "bertpope"
- Contributions:66
you have my vote. good job.
- Nina Harris, "NinaHarris"
- Contributions:257
It's a good strategy, but being a landlord can sometimes be challenging.
Good luck to you
Good luck to you
- HomeSand.net, "White Picture"
- Contributions:4392
Yes it is good and easy strategy but the real life is not that easy.
Good strategy?
My plan is to buy condo around $200k putting down $100k and then live there for couple of years paying less than current rent, maybe half, pay it off and then rent it and move to new detached sf home. I could use the equity in this condo to buy the sf home.
Reason I don't plan to buy sf home right away is that I am not sure of staying in one place due to job. If I have a condo, then i can lock it up and/or rent it out and move to other places for work without any hassles, it will cost less than renting a condo. If i survive my current job for few more years then I can rent it and use the income to pay for the mortgage on the sf home.
Stating a discriminatory preference in an advertisement for housing is illegal. If you think this content is discriminatory or otherwise inappropriate and feel it should be removed from Zillow, please let us know by completing the information above.
We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.