When is a mortgage a good move?

Question

As an aspiring full-time real estate investor/investor, should I take out a mortgage on the home I want to purchase before or after I begin to purchase rental property? Should I wait until I have a substantial amount of generated income from properties I have purchased where I can afford to continue the acquisition of new assets and pay a mortgage on a home? I am trying to get an idea of the best moves to make after I pay off my consumer debt and student loan debt.

Thomas S. · Answer

Have you considered the fact that your parents may not want you living with them.

Peter Mckernan · Answer

Account Closed great call on paying off the student loan and other debts! My wife and I have chosen to take the same path, even after investing in a couple rental properties on my own prior to meeting her.

The next course of action is really up to you. You could generate more income and save a lot to put down on a primary home, or buy a couple rentals prior to that, and then a primary home. Just realize you will need less money for your primary home to buy it since it’ll be a first time buyer position, and you’ll be living in the home. The other rentals will need a higher amount down since they’ll be non-owner occupied properties and lenders want to see more money since it’s easier to walk away from a rental than a primary home.

Think it over, and see if you want a house of your own first, or rental properties first.

Account Closed · Answer

I haven't started paying off my debts yet but I am mapping out what I want to do years down the road once that is out of the way. Thanks for the info on the down payments. My first thought is that if I were to save and purchase my primary home that I would not be able to save a whole lot for purchasing rental properties .. I'm thinking I would rather live with my parents and pay low rent while building a real estate investment portfolio and then purchase a home once I'm generating enough income to invest and pay bills.. rather than getting tied down with a mortgage and potentially ruining my opportunity to invest full-time..

Samantha Klein · Answer

I house hack and won't move until I have met my income goals. It's much easier to afford a nicer house when you already have a good income established and it's also much easier to save for down payments if you don't have a huge house payment on a personal residence.

When is a mortgage a good move?

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