Quote:
Originally Posted by WayFast84
I can do it in NJ. It's called strategy. A nice 2 family house and the rent coming in from the one side pays the mortgage. Now get a house with a bunch apartments eventually you can make a profit... But hell what do I know my dad's only been renting out houses for 30 years...
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The problem with that strategy is that you'll need 20% down in cash to avoid PMI on the loan you'll have to take out on the house you plan on renting and last time I checked most houses in NJ START around a quarter mil, so that's $50k out of pocket up front then the permits and inspections to allow it to be a rental. With the cost of owning a home and then being a landlord, you also have to fix all the crap that breaks in the house which comes out of your pocket. Then, you plan on buying your own house. There's another large out of pocket cash expense to put down on a second home loan. That's also assuming your credit is out of this world to allow you to take out two mortgages for most likely over half a million dollars. With the way the economy is now, you can't expect to make enough money off one rental to pay two mortgages. Your dad may have been doing it for 30 years, but the economy then was WAY different than it is now. You'll need a massive up front cash investment and I don't see you taking in enough from one house to pay for two. I had friends I used to work with that tried it and with owning homes in a very desirable area and also making six figures at their job, they still had trouble making a profit at the end of the year with all the expenses.
Also, if you're talking about buying apartment buildings, you better have one wealthy investor behind you. A small apartment building can cost you millions of dollars and the cost to run them is in the hundreds of thousands every year. If you're talking about a sub-divided estate, good luck with that. NJ has been trying to get rid of those for a while now and a lot of towns have stopped issuing new permits for it. That plus the cost to purchase one is well over a million.