Buying a bad idea?
I'd love your input on my situation please. Sorry for the long post.
I currently own a condo out of state. Bought in 2002 for a good price but with all the foreclosures it brought the selling price down significantly. I've had tenants in the place for close to two years now. I'd prefer not to be a landlord but it pays the mortgage until the market comes back enough to sell it without losing money. Anyway...
Two years ago I moved out of state for a job. I've been leasing a little (2br, 1ba - 800 sq. ft.), old bungalow house which runs me about $1800 a month plus utilities ($350 mo - it's an old place) and upkeep (landscaping, etc.). I've given this house a good shot for two years but honestly, it's way too small. No closets and the one bath is the size of a closet (seriously). I either need to move up to renting a larger house which would mean about $2000+ a month or buy a distressed property at around $180000 (including down payment) and fix it up. Neighborhood comps are $250k selling within 60 days.
Renovation is one of my hobbies. Not major foundation/roof repair renovations, but cosmetic renovations are right up my alley. The homes I'm considering have good bones and are in well-established neighborhoods with a good track record of selling in a timely manner - as long as they're renovated(which is where my sweat equity comes in).
I'm not looking at making a lot of money by buying. It just kills me to throw $2000+ at rent. I'm financially stable and make a good living so the down payment and two mortgages (my condo and new house) aren't an issue.
I've run various scenarios with the current market activity and think that as long as I live in the place for at least 3 years and do most of the renos myself, I won't lose any money (worst case scenario). If I stay longer or if the market gets better, I could even make some money.
Thoughts on this? Good idea? Crazy out of my mind?