It was the best house I could afford in my area for $430,000 for the square footage, proximity to work, condition, school district and rent potential being close to Cal State Fullerton. Rent potential was a large factor in my purchasing decision.
Due to the unique home layout, I was able to rent out a portion of my house for upwards of $1,236 / month offsetting my monthly payment with impound (property taxes & insurance) of $2,145.80 / month. So that was $909.80 / month for the house out-of-pocket. Principal is about $674.77 / month (which goes back toward equity), so I was really paying $235.03 / month for 3 bedroom, 2 bath, 1,500 sq ft (including garage which is my man cave). This doesn’t include home appreciation.
January 2015, my home was appraised for $616,000 which enabled me to get a home equity line of credit available to be drawn upon at $57,000 which will most likely remain untouched for now until I find a worthy investment.
The previous apartment around 2007 – 2009 was a 2 bedroom, 1 bath apartment, for $1,050/month. With my Veteran status, I managed to do 10% down, and refinanced a couple times down to 3.25% over 30 years in November 2012. Down payment sources came from savings, Roth IRA contributions, and saving up for about a year prior to the house purchase living in a hotel suite paying no rent
Due to California, Proposition 13, my property taxes cannot increase more than 2% per year, which incentives me to stay put and not sell. My intention is to rent out the property if I move out in order to maintain the highest potential cash flow, and cash out the equity instead as necessary as alternate investment options become available.