/biz/ - Business & Finance

[Anonymous No.49941099]

>Put 5% down on a house
>Rent it out so that rentcucks are paying off the mortgage
>Repeat every time you get enough to put 5% and get a new mortgage

What’s to stop someone from doing this, provided they have enough income to afford the mortgage down payments? Seems like a comfy way to collect houses.

[Anonymous No.49941132]

>>49941099
Until there is an economic downturn and you cant rent out your houses which also just crashed in value so you cant afford to sell while paying off the mortgage

[Anonymous No.49941142]

>>49941099
>Rentoids
>Paying rent
You'll be very overextended. If even one of your renters stops paying their rent you'll go underwater. Plus there is the risk of the renters trashing your place upon exit and, even worse, nogs moving in.

[Anonymous No.49941157]

>>49941132
But why would you not be able to rent them out during a downturn? People still need somewhere to live even during a recession.

[Anonymous No.49941164]

>>49941157
the bottom will be homeless, others will move with relatives

[Anonymous No.49941165]

Yes, retard. That is what a lot of people do. Things to consider are current market rents vs mortgage. Also make sure to account for Capex and opex. If you're still cash flow positive do it. Also you need more like 20% down if you're not going to live in it. Else you must live in the home for one year. After a few homes your DTI is gonna be off so banks won't lend. You'll have to put them in an llc at that point or find alternatives(really not an issue if you get to this point and aren't underwater). I do challenge you to find a cash flow positive property right now in this market..

[Anonymous No.49941195]

>>49941132
That's never going to happen though, the housing market will never crash.

[Anonymous No.49941233]

>>49941165
first real estate poster I've seen on this board that actually knows what they're talking about

[Anonymous No.49941264]

>>49941157
What happens when your rent can't pay for the mortgage due to economic downturn

What happens when you're unable to find a tenant for months

Lots of overleveraged retards try to do this exact same thing and get blown up.

[Anonymous No.49941278]

>>49941165
Thanks for the insight, senpai. I didn’t know about the 20% down or 1 year rule. I bought my first home last year (to live in) for 5% down, and it’s up 20% in 1 year. Feels good. I have to move in 2024 due to my job, so I’ll be looking to pick up another one for 5% down since I’ll be living in it, and I’ll rent out the first one. My mortgage is $2400 and I’m confident I can get $3500-4000 in rent in this area. 20% down is hard to swing though. Can see how that would be prohibitive for many.

[Anonymous No.49941280]

>>49941165
>I do challenge you to find a cash flow positive property right now in this market..
I mean, you don't have to find them given what we're seeing now. They'll come to you. That's kind of the whole point.

[Anonymous No.49941291]

>>49941157
They just wont pay you rent. Like during the last pandemic.

[Anonymous No.49941387]

>>49941099
If you can find places where rent is high enough to pay off a mortgage, and the people in the area aren't shit, then it can work.
In southern ontario where I am the mortgages are higher than rents though.
i.e. 600k for 3 bedroom is about the cheapest you can get, and even that might sell over asking. Need a 5.83% down payment for mortgage insurance, so that's $35k and a 5% fixed rate mortgage is $3417/month. Variable rate at 3.25% is $2856/month.
Similar 3bedrooms are rented at $2200/month, with utilities included. Some nicer 3bedrooms in a better location are rented at $2750/month.

I wish I could do this strategy to build wealth but no matter which way you slice it buying is way more expensive than renting in my area, so I'd have to rely on appreciation to get any wealth from it, and that's a risky bet.

[Anonymous No.49941488]

>>49941099
they are called slumlords, there are lots of them.