Obviously depends upon demographic location. Market rents in some areas of the country will not come close to covering expenses. I live in the S.F.bay area where a "starter home" starts at $400,000+. The rental revenue for this property,(2br 1ba, 1200sq.ft.) would be approximately $2,500/month max, and is currently FALLING. The total PITI would be( assuming 20% down)approximately $3,000/month. Few individuals in this market segment can manage a 20% down and are often entering the deal at 10%. As you can see, quite a committment for a first time buyer, let alone a fledgling young investor looking to build an investment portfolio. For your reference, a bit on my background; I am forty three, married sixteen years, My wife is a dentist in private practice, and I am a hedge fund manager and was a partner (50%owner) of a real estate sales firm in San Francisco. No children. Your advice is sound as I have relatives in Houston that are following your lead. They have an annual household income of $200,000, own a primary residence and two single family homes for rental revenue and appreciation. In my neck of the woods, one requires a consistent MINIMUM annual income of $250,000 to even begin thinking about attempting this endevour. Consider yourself fortunate to earn an income that is "out of phase" with your market. Leverage is good ,but not in all cases or locations. Meanwhile,us poor "west coasters" are looking for another way. Good luck with your plan. It certainly looks like you're on your way. Your posts have been quite refreshing compared to most I've encountered here with regard to the subject matter.
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