I’m 21 and moving out of my parents house. Should I rent or buy?

7 Replies

I’ve been studying real estate through BiggerPockets for the past few months now that I have saved money for the past few months and am ready to move out of my parents house. I was wanting to buy a 2-4 unit and live in one side and rent out the other (house hack), but now that it is here I think that I should maybe rent for 1 year or so just to learn the ropes of living on my own. Also to get to know the area better of where I will be moving to. What do you think I should do?

I think you should buy. The living expenses are the same whether you rent or buy. Utilities, insurance of some sort, cable, internet, etc. 

The difference is, you could be paying for something you own and could build into a cash cow, or you could line the pockets of someone else who is getting their bills paid by renters. I like the idea of someone else paying my bills lol

Feel free to reach out if you have any questions :)

@Kade Honaker that is really dependent on what you want. If you buy a house you own it and will build some equity. But the downside is you give up a lot of mobility. Moving isn’t easy when you have to sell a house. I moved twice last year for better jobs and I invest out of state so no matter where I go I can keep investing.

Grant cardone talks about this concept a lot and I think it’s not something to overlook

 I think it really depends on how steady your income will be. Maybe find a short term lease (something like 6 months) to help you get a grasp on the areas where you are thinking of investing as well as help you get some peace of mind on how your employment is working out. 

I bought a REO/Fixer. Best decision ever. The equity you can force is life changing when starting out.. I’m not talking millions of dollars, but to a young twenty something 20-50k in equity/tax free gain after two years is a great chunk to start your investing career with! I like the house hacking thing people talk about too with the duplex etc etc.

Hey Kade,

Doesn’t sound like your parents are kicking you out just yet, so as someone who has been renting for the last 7 years because of school & moving away for full time employment, I say do your homework and due diligence and look to buy. Feel free to message me if you’d like to discuss further!

Dan

845-558-6077

Dude, if you're moving out of your parents house and have the money to buy, I'd say that you're in a really excellent situation right now and I would de finitely recommend that you buy a house rather than renting! At the end of the day, renting means that you don't actually own anything, and while having a house will probably mean that you'll have to be paying a big down payment, if you can afford that, you'll be adding a huge asset to your name. If all things go South, you'll still have a roof over your head that a landlord can't kick you out of because hey, you're the landlord of the property you own! Just do your finances and find out what works the best for you mate!

@Kade Honaker ,

You are in the perfect position to start your real estate investing career off on the right foot. I bought a house hack and was able to live for "free" when I left home. It doesn't sound like your parents are pushing you out, so:

  1. Take your time to understand your current market
  2. Become an expert in it 
  3. Look and underwrite every deal that you may want to buy
  4. Connect with a real estate investor friendly realtor and be nice to him:) 
  5. Sit down with a bank now and get pre-approved, make sure you have enough capital to pull down a deal, and if you go 3 or 4 units make sure you have enough post closing liquidity.
  6. Don't be afraid to write offers, don't just low ball, but if the deal makes sense, pull the trigger. 
  7. Think about getting a mentor in your market, so you can "fact check" your numbers
  8. Go to your local BP meetup, you will often find your network there, this has been invaluable to me and my career

Answer this question: What is better than living on your own, WHILE having other people pay for it, WHILE starting your clock as an experienced real estate investor? 

P.S. Have you read @Scott Trench  book yet? He does a great job explaining how you should start with trying to eliminate your biggest expense, which is housing. 

Best of success! 

Scott Hollister, Real Estate Agent in Connecticut (#0806447)
(860) 375-3035

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