I make ~185k per year in LA, and want to buy a house/condo. I found one for $850k in a great area - can rent out the other two bedrooms to eat a lot of the monthly cost. Is this a bad idea?

likehelpful
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I bought a $760k 2bd/ba condo on a $180k income last year. Probably at the threshold of comfort in terms of expense out of my paycheck. But hopefully my wife goes back to work next year after kiddo #2.

Don’t forget to factor in HOA and city taxes.

likefunny

Your wife isn’t going back to work my man

likefunny

Can you afford the mortgage completely on your own and still more or less survive? If yes then proceed with caution, if not then no.

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I wouldn't make home purchasing decisions on anything other than your base salary - except for maybe a very steady side hustle. I always cringe when I hear people factoring in being able to rent out something. The suggested spend on housing is usually 25% - 35% of your take-home. Even at 35, though, think about his lifting that is and how much you could do if you used 10% of that.

like

How much of a down payment for you plan on putting?

like

When I bought my first house I rented out two bedrooms for extra income but I was next to a law school so slightly more mature renters and the house was only $215k and I made $100k at the time. Eventually I rented out the entire house but when you’re not living there it’s much harder to control its condition.


I guess I’d have to see the detailed math but how long do you plan to stay there? How much are you putting down? Could the entire house rent for the full cost of the mortgage taxes and interest if you decided to move out? I don’t know the LA market at all and the ability to get good renters - especially at the price you’d need to charge to make it work. Would be helpful if you shared those numbers.

Do you have a hefty down payment? Is the property you’re looking at under market value?

F

Buy a smaller house one that you can afford, going small will save you a ton of dollars now and forever. I live in a big house and use only the kitchen the living and my bedroom 80% of the time all other spaces are wasted.

I did something similar but in Chicago. I still own the property and rent out the whole thing now. I first rented out 2 bedrooms to acquaintances and then ultimately wasn’t there much so ended up renting out the whole place when my roommates moved out (it’s near a hospital so tends to rent to nurses or med students). I still own it, still rent it out. It covers its mortgage and costs.
That said, I wouldn’t do it unless you feel like you are in a strong rental area and it covers its total cost as a full rental and you have an exit strategy for when you don’t want roommates.

That’s 55%+ of your GROSS monthly income. No way...

Yeah you won’t get approved

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