Newbie looking for smart tips buy rental or rent current?

Question

Looking to get started in the business. Me and my wife are thinking of purchasing a new home for our growing family, or land to build a dream home and rent out our current residence. If I did the math right (50% rule) we should cash flow between 400 - 500 a month. But we have been thinking that maybe we should stay in our current home and buy some rentals... we have a significant amount of equity in my current home. both have stable jobs...looking to make a wise decision to break in real estate.

Bram Spiero · Answer

@Darryn Carter, Welcome to BP.

Investing and buying a home are often different things.

A home is more of an emotional investment rather than a financial one.

Rules of thumb are great for getting a general feeling for if something cashflows or not.

They are no where near sufficient for determining what real projected expenses will look like and what kind of cash flow you can expect.

Use the resources here on BP to learn to analyze your home as a potential rental property and use the same knowledge for analyzing potential investment deals.

As to your question about renting out your house and buying a new place or concentrating on building up a portfolio, that really depends on what your short and long term goals are. Share some of those with the forum and you may get a more specific answer.

Umar Javaid · Answer

Welcome to BiggerPockets @Darryn Carter

Good Luck with your REI venture!

Newbie looking for smart tips buy rental or rent current?

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