The weather is cooling off in Lubbock. In fact they say it will be 38 degrees tomorrow morning. Sounds like time to check on your supply of firewood.
People in Lubbock are buying and selling homes during this fall season. However, there are definitely many great homes on the market and it seems that more sellers are competing for the fewer buyers. And many sellers are willing to consider offers. So, and I know I'm repeating myself, it is a good time to buy.
For folks like myself who already own their home and have no plans to move any time soon, it can seem we are missing out. This brings me back to real estate investing.
What if I know that in ten to fifteen years, we will retire and want to downsize? Our house isn't huge but the upkeep, when you consider re-painting every few years and lawn care, is significant. I can envision us living our 'golden years' in a townhouse or garden home. What if I buy a garden home now at a fair price, lease the garden home for a number of years allowing the tenant to essentially make my payments? I will lock in the home where I want to live in 2020 at the 2007 price. And by the time I move in, if I finance the home on a 15 year note, it will be almost paid for. What am I waiting for?
There are limitations and considerations to this potentially great home purchase plan.
- Does my spouse agree and is he willing to sign on to this long term plan?
- Can I secure financing for another piece of real estate?
- Will I be able to keep the property leased at a rate that will allow a positive cash flow?
- Will I be able to maintain the condition of the home through the years and most likely a number of tenants?
- Will that garden home still be the place I want to live when year 2020 rolls around?
I am a relatively persuasive person when I do my research and am confident about the deal I'm pitching. So I think I can get agreement to move ahead. How about you? If you need help with this part, give me a call. We can discuss the particulars, formulate a plan, and once we have done our research we can talk to your better half.
I would need to get pre-approved for a loan in the price range of the home I am considering. Now if I finance for fifteen years without contributing a large down payment, it may be tricky to maintain that positive cash flow. However, that is why it will be important to shop carefully and find a good property at a good price. Maintaining the garden home over the years should be straight forward. Tenants today are accustomed to paying a hefty deposit and I would have them sign a lease holding them responsible for any damages above and beyond their deposit.
It is a ladies prerogative to change her mind. Ideally, I will be thrilled to move into my garden home in 2020. I will give the tenants notice and when they move out, I will have it cleaned, painted, and updated. No telling what they will have in the way of lighting and cabinetry by then! We will move in and live happily ever after.
OR, we will have decided we want to live elsewhere and that the garden home doesn't fit the bill after all. You know, even if that happens, I think this will still have been a win-win scenario. If we continue to rent the home it will be paid for in two years and the rent payments will then be a stream of income. Or we can sell the home and make a nice profit. Probably enough to put a large dent in the cost of the downtown loft we decided on.
Enough dreaming about the future. The market makes it a great time to stop contemplating and start shopping. Give me a call or send me an email if you'd like to visit about this or any real estate needs you may have.