is your home just another property?

Question

I just started looking for my second property which got me thinking about the role of my home. Is it important to separate your home when thinking about real estate investing? I'm curious if anyone has an approach/philosophy on how to think about your own home relative to investment property.

• Do you think about your home differently in different market conditions?
• Do you separate it out entirely?
• How do you think about selling/renting your existing home when you're ready to move on?

Evelyn Roper · Answer

Yes, I think of my home as an investment (even though in reality, it is a liability).  When buying, keep the cost of rent in mind to ensure that the cost of ownership is less than renting.  Improve upon it and add value.  That is important because so many people, are upside down in their mortgages.  If you had to move out today, would it rent/sell for more than the payment?  Don't get "stuck" in an overpriced mortgage.  It doesn't matter if it is a primary home or an investment property.  The hardest part (for me) is that I get emotionally attached to "home".  I suspect I will have a harder time selling/renting it than I would a property bought solely for investment but if the money is right, and I could profit substantially....load up kids, we're moving ;)

Brent Coombs · Answer

I always recommend looking for a home/property where your net outgoings would be cheaper with a mortgage than if you were renting there. Also, can the improvements that it needs (or you want to give it) add MORE value than their costs?

ie. Yes, think of your next home as an investment. Is it a poor one? If so, why buy it? My 2c...