Would love your opinion on a few scenarios
Hi All!
Would love your opinion on a few scenarios...
1) If you live in an expensive metropolitan city and properties are just too much to purchase, is it a good idea to invest in a property in a more affordable city (buy & hold - rent out), but rent where you live ? (Also knowing you will only be in the expensive city for a few years max)
2) If you have money for a small down payment for an investment but not much after as reserves - would you just keep educating yourself while saving more for reserves? Or look for a property that costs less (less down payment) just so you get started somewhere?
I appreciate all of your help!!
1. Yes it can make sense but you need to do the math on your specific situation to know for sure. IF you don't plan on staying somewhere long term it rarely makes financial sense to buy a primary residence.
2. Save for reserves, if you have determined a market you want to invest in but don't have enough money yet don't go to a different one just because it has a lower sticker price. If you can afford something in your desired market but not everything you can start looking but not necessarily buy right away.
Thank you @Aaron K.! I appreciate your advice!
@Alexandra Sales I am in a similar situation, for me I am going to go for it and take the leap in investment rentals, I believe I will see the home  appreciate over time as well as reviving some cash flow from the rental. as long as you screen for really good  tenants you should have any issues.
I live in a HCOL area (In Canada) and recently purchased my first rental at about 1/5th of what single family homes cost around here, so I'm doing everything remotely. Being able to get started, learn, and not sink every dollar I have so I have some reserves has personally helped me a ton.
Obviously there's some issues being long-distance but I've now got a solid team together, fixes done, a tenant, and some money coming in. Just make sure you do your research first.
@Alexandra Sales
1) it can make great sense to invest outside your location. If your area won’t cashflow and you don’t plan on staying, no sense in making it your farm.
2) Reserves are important and becoming more of a big deal at the moment. They can keep us from making dumb decisions. I’d keep analyzing deals in your target market and looking into more favorable financing. You might find a deal where you’d end up with adequate reserves with a favorable loan you weren’t previously aware of.