You’ll probably get lots of advice from family and friends when buying your first home, but here’s one additional piece of advice to consider: Think ahead. You’re not just buying a home to live in, you’re investing in your future!
Your first home can be a stepping stone for future real estate investments, so think creatively when you’re house shopping. Even if you can’t see yourself now as a landlord, keep this option open and buy your first home with a future rental option in mind—it has been the first step to wealth and security for many, many people.
What are some possibilities?
What about purchasing a duplex? You can live in one unit and rent out the other, and your tenant can help you pay off your mortgage. Then, in a few years, you can either sell the duplex and use the proceeds as a down payment for another home, or, when you buy another home, keep the duplex and rent out both units for a steady income stream.
Financing a duplex is also easy. The good news is that you can use the same first-time homebuyer programs that are available for single-family purchases, as long as you intend to live in the property.
What about buying a condo or townhome? The same resale and rental options are available, but with the added benefit that renting a townhome or condo makes landlording even easier—there’s practically no maintenance because the condo association usually takes care of all exterior maintenance and repairs. If you want to consider this option, be sure to find a condo that allows rentals, because some do not.
Even if you want to buy a single-family house for your first home, think about its future rental possibilities: make sure the location will be attractive to renters; find a home relatively close to public transportation; and make sure all the mechanicals are newer or in optimal working condition.
There are many details to consider when buying a home with future rental potential, so be sure to tell your Realtor® that this is something you might be interested in so she can guide you. The important thing is to look at your first home with an eye toward its future value!
Janet Contursi has been a Twin Cities Realtor® for more than 10 years. She is expert in all types of residential real estate, including short sales and foreclosures, and she especially enjoys working with first-time buyers and sellers. Contact her at (612-655-1207) or: firstname.lastname@example.org