DC Buyer: PR Professional Looking for Home With Rental Income

• March 24th 2010

by Martin Smith

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In the DC Buyer feature, UrbanTurf looks at homebuyers from various demographics and provides available housing options for them in the current DC market. After presenting some choices, we ask our readers to help them make their choice.

This week, we’re working with Nick, a 27 year-old public relations professional who would like to purchase his first home with some down payment assistance from his parents. He earns $75,000 a year as a base salary, with some additional income from bonuses. Nick is already in possession of a generous gift from his parents of $150,000, and on top of that amount, Nick has saved $50,000 bringing his total for down payment and closing costs to $200,000. He has already been approved for a $460,000 mortgage, qualifiying him for a home around $660,000.

Nick’s plan is to find a three-bedroom house or bigger, and use the rental income from the extra bedrooms to help him cover the monthly costs of the mortgage payment. He was in private negotiations with his landlord to purchase the five-bedroom house he currently rents in Shaw, but after a home inspection process that revealed the extensive work that it looks like the house will need in the near future, Nick is having second thoughts. While Nick likes Shaw, he’s open to other neighborhoods. His only real requirement is that the property have room for his dog, preferably in a fenced, outdoor yard.

The first place we’ve found for Nick is 1761 Harvard Street NW. Priced at $619,000, this three-bedroom, three-bath townhouse is conveniently located in Mount Pleasant, which provides easy access to Columbia Heights and Adams Morgan. This end-unit home has beautiful views, a spacious rear deck, and a new kitchen with stainless steel appliances and granite countertops. The downside to this property is that the third bedroom is classified as a den in one part of the listing, so it may be small, which would reduce the amount of rental income Nick could collect.

The second choice is 1428 Taylor Street NW. This three-bedroom home is on the market for $499,000, and provides an excellent value for the location just north of Columbia Heights. While it is a little dated on the interior, most of the updates to modernize the home (such as removing the mirrored wall in the living room) are easy and relatively inexpensive.The property features a fully serviceable kitchen as is, and Nick could undertake the remodel as a way to boost his equity in the home and produce something that is customized to his preferences. Nick’s dog is also sure to appreciate the massive backyard as well.

The final choice is in 16th Street Heights at 1322 Emerson Street NW. This renovated four-bedroom that also includes a large finished attic, is probably the best of the three properties when it comes to rental potential. In addition to a large main level and amply-sized bedrooms, the property has a pretty big kitchen that leads out to a deck and a fairly deep backyard that would provide some good run-aound room for Nick’s dog.

Given these three choices, where should he put in his offer?

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/dc_buyer_pr_professional_looking_for_home_with_rental_income/1910.