We've still got about 3 years to make this decision before training is over, but my husband and I are starting to mull this over now.
We bought our home in medical school for $175k in 2012. We put little down (I think just 3.5% with an FHA loan) and have been very fortunate to buy at the beginning of a very strong real estate market--DFW area. In 2014 the home appraised for $230k and we were able to refinance and get rid of PMI. At the time, we figured we would sell when training was over, so we went for a 5/1 ARM in order to keep the interest rate low. Now, I estimate the home to (conservatively) be worth about $250k.
The "plan" has been to stay in the home for 1-2 years into attendinghood if we end up in this area long term (big possibility) in order to save money and pay off student loans (100K). If we moved elsewhere, we would sell. The profits would go towards a down payment on a bigger home or paying off the loans.
Now we are really starting to wonder if we should keep it as a rental. Whether or not we stay in the area would factor heavily in this decision, but if we stay, the idea is starting to seem very attractive. We chose the suburb we are in because it is the closest to downtown (and the med center) with good schools--needless to say, it is very popular. It has always had a strong rental market, even in downturns. In fact, a lot of the homes on our street are rentals.
The monthly payment is $1350. It would demand $1800-2100 monthly on the rental market. I do expect our monthly payment to go up over the next 3-5 years due to property taxes (Texas isn't cheap in this regard and it will slowly catch up to the value of the home) and of course, the ARM. Still, I think it could be a relatively self-sustaining deal, assuming we kept the "profit" to do maintenance and cover for any time the home was vacant.
This area is also attractive to residents/fellows with families for the same reasons we moved here--I think with enough networking I could manage to get a medical family in here without having to list it on the market. Not that a medical family=good renter, but I think there is a better chance than your average renter. Even if we had to list it, rentals move quickly.
The biggest downside I can think of is the management aspect--it would fall to me. I don't work anymore and wouldn't mind the challenge of being a landlord, but I do believe it could be painful to see the home I brought babies home to be potentially abused by renters.
The biggest upside would be having a nice, paid off asset with a modest income stream right about the time my kids hit college and potentially start getting married (weddings).
What are we missing?
We bought our home in medical school for $175k in 2012. We put little down (I think just 3.5% with an FHA loan) and have been very fortunate to buy at the beginning of a very strong real estate market--DFW area. In 2014 the home appraised for $230k and we were able to refinance and get rid of PMI. At the time, we figured we would sell when training was over, so we went for a 5/1 ARM in order to keep the interest rate low. Now, I estimate the home to (conservatively) be worth about $250k.
The "plan" has been to stay in the home for 1-2 years into attendinghood if we end up in this area long term (big possibility) in order to save money and pay off student loans (100K). If we moved elsewhere, we would sell. The profits would go towards a down payment on a bigger home or paying off the loans.
Now we are really starting to wonder if we should keep it as a rental. Whether or not we stay in the area would factor heavily in this decision, but if we stay, the idea is starting to seem very attractive. We chose the suburb we are in because it is the closest to downtown (and the med center) with good schools--needless to say, it is very popular. It has always had a strong rental market, even in downturns. In fact, a lot of the homes on our street are rentals.
The monthly payment is $1350. It would demand $1800-2100 monthly on the rental market. I do expect our monthly payment to go up over the next 3-5 years due to property taxes (Texas isn't cheap in this regard and it will slowly catch up to the value of the home) and of course, the ARM. Still, I think it could be a relatively self-sustaining deal, assuming we kept the "profit" to do maintenance and cover for any time the home was vacant.
This area is also attractive to residents/fellows with families for the same reasons we moved here--I think with enough networking I could manage to get a medical family in here without having to list it on the market. Not that a medical family=good renter, but I think there is a better chance than your average renter. Even if we had to list it, rentals move quickly.
The biggest downside I can think of is the management aspect--it would fall to me. I don't work anymore and wouldn't mind the challenge of being a landlord, but I do believe it could be painful to see the home I brought babies home to be potentially abused by renters.
The biggest upside would be having a nice, paid off asset with a modest income stream right about the time my kids hit college and potentially start getting married (weddings).
What are we missing?
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