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REAL ESTATE First home

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JesseO

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Jul 25, 2007
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For the purchase of a first home, I plan to make sure it's an investment first, and a residence second. I was wondering what kind of % discount would makes sense if I only lived in the property for 2-5 years before selling it. I know commission and closing costs can eat away at any appreciation in such a short time span, so what should I look for here?
 

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AroundTheWorld

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Jul 24, 2007
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I would look for something you can add value to in some way...

We got our start by purchasing a home that we later turned into a college rental.. we were able to take the place (sfr) and turn it into a duplex. Because it was only 4 blocks from campus, we decided to hold it long term - as it does make a great rental. always occupied.
 

biophase

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Also, if you know that its going to become a rental property somewhere down the line. Make sure it at least will breakeven for you when you rent it out later. Since its a residence first, you can't really base your purchase on cashflow. But if you get a house that is negative $1000 a month vs. renting, it's not going to be a good investment later on.
 

yveskleinsky

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Jul 26, 2007
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I was wondering what kind of % discount would makes sense if I only lived in the property for 2-5 years before selling it. I know commission and closing costs can eat away at any appreciation in such a short time span, so what should I look for here?
I don't know what you exactly mean when you say % discount, but I think I see what you are getting at. I would take a multi-faceted approach to this and 1. find out what appreciation rates are in your area (ask an appraiser not a Realtor) 2. Find out the median home price in that area, and then look for a home that is below that number- and ideally under market value as well. 3.Find out what rental rates are and like the previous post said calculate what you could get for rents now and make sure that it is over what your mortgage would be.
Good luck- and great idea!
 

Jason_MI

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Jul 25, 2007
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If you can, treat it like any other investment....that is, go for the discount. And I think you said "Live in it for TWO years before moving"....no benefit for staying longer, tax-wise.

I did real Volluci's chapter on tax strategey's; the 1031 thing to a rental you live in was interesting.
 

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