Quote:
Originally posted by NoSoup
Nicion, you are correct for the most part, however, boredjerk did say that he lived in a college town with outrageous rental rates. The amount of rent you are able to collect varies widely based on your location. For instance, I live in Green Bay, and I am currently renting a 1200 square foot 2 bedroom apartment (vaulted ceilings, fireplace, attached garage) for right around $600.00/month. I was looking at several places in Chicago, and a similiar apartment there would cost me almost $1400/month. I would assume there are similar variations with duplexes or other rental properties.
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While rental rates do vary greatly from place to place, in general, property values mirror this behaviour. High cost of real estate generally equates to higher rents, and vice versa. That being said, I will have to look into investment properties in college towns in the US - if a 20% return is realistic, it would be worthwhile to purchase four or five of such places.
Forgetting those issues for the moment, and considering this is an "ask the loan officer" thread... let us explore. Here's the situation. I am a US citizen, though I have worked as an expat for my entire career. I have never had a credit card, nor taken out a loan. I earn a good income, and my living expenses are generally fully paid by my clients. I am considerring investing in property in the US, and with interest rates as they are, it makes more sense to put 20-30% down, and take the balance as a mortgage... then sit back and let the tenant pay that off. I see two primary obstacles to this approach:
- I have no fixed address (usually live in hotels)
- I have no credit history
Given the above, how likely would I be to get approved for a mortgage on an investment property (or two or three...)? Is there anything that can be done to improve the view that a lender would have? Despite good income and virtually no expenses, I am certain the lack of credit history, and possibly moreso the lack of a fixed address, would prove to be problematic.
Looking forward to your thoughts.
-N