Why are you considering financing and paying interest when you have the cash? Would using your own cash wipe out your savings?

Is the property in a good neighborhood? Would finding a tenant be easy as pie?

Ask your self tough questions and see if it is truly worth the risk as the above poster has noted and see if it truly worth it.

If you really want to do it, better use your savings because this is considered an investment and that's what savings are for. Don't use all your savings though.

Depending on how big they are, use up to 80% of the savings and leave 20% for possible situations in the future when you need money very fast.

The rest of money needed you can take with a credit and fix the house and give it for rent to pay the loan.

It all depends on how much money you have exactly and how much is needed to repair the house.

Also it would be possible that not all money is needed at once... maybe you need 100.000 dollars but not all at once... maybe you need it in 6 months depending on how the work is done.

It could wipe out all of my savings. Most of the work will have to be done before the property can be rented. I am still working on getting bids and talking with Realtors to find out the rental market in the area. It is one of the nicest neighborhoods in San Francisco.

You can't really put time on this. It depends how much you can charge for rent, first and foremost. Generally though, the rental market is good for the landlord when people can't afford to buy properties

Very well said

Yes, you really have to ask yourself if it is worth the risk?

Yes, but ONLY after you do 4th grade math.

For example:

Wrecked house purchase price: $50,000

Cost to rebuild:......................$30,000

Total chips in the game:..........$80,000

Gross annual rent:....................$9,600

$9,600 divided by $80,000 equals 12% GROSS annual return on investment.

NOW,...

Yes, you really have to ask yourself if it is worth the risk?

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

I agree...if you can afford to spare the cash...do it.

You generally must include in your gross income all amounts you receive as rent. Rental income is any payment you receive for the use or occupation of property.

As a result of this change, many individuals and small businesses found themselves subject to an unexpected self-employment tax burden. Two groups that exemplify the effect of this hidden tax are S corporation shareholders and retiring farmers. Members of these groups often participate in personal leasing arrangements that do not constitute a separate trade or business.