Should I buy another property or Rehab my primary one?

Question

Hello Everyone! I am excited to be here. I have been a long time listener to the podcast and now I am ready to take first step.

#1 I recently bought my first Home which is a Condo in July of 2022 as my primary home. I bought it with 0% down for 386K @ 4.25% fixed for 10 years and then variable. It is quite outdated and need some cosmetic upgrades. It is in A grade area and would easily go on rent for about $3000/month. My monthly payments+HOA on the property is about $3200/month. So I wouldn't make any cash flow but its an appreciating property and I would only have to pay $200 and rest I can save. If I put this property on rent, then I would move in with my parents and live there (I am single)

I have some money saved up that I can do the renovations of the house with that. I can do that OR:

#2 I can use the funds to buy another property (~200k), hopefully turn-key or minimal work, and use my funds as a downpayment and put it on rent right away and have some cash flow.

I only have funds for either renovation or for down payment.

Please advise, which avenue should I pursue?

Thank you so much in advance

Account Closed · Answer

It sounds like the question is - Do I spend 'X' amount of money to rehab my primary which will probably make it cash flow.

Or, do I go spend 'X' amount to acquire another property that you stated would cash flow.

Assuming you lived with your parents, paying $200/mo to continue owning and receiving equity in a grade-A location seems like a good move. If you go acquire another property that cash flows, you then have that property being paid off and can use the surplus towards paying off the remaining mortgage on the place you currently live in. Sounds like you'd have two properties basically paying themselves off while you live relatively expense-free with your parents, I'm assuming.

Sounds like a good financial situation to me. Two free homes is nice.

Should I buy another property or Rehab my primary one?

1 Reply