Risk Comfort level vs. Over-extending finances

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Hi Investors,

I'm investing in Single Family homes. My question is, how do you know whether or not you're over-extending financially. I know this may be subjective and based on one's comfort level, and am curious what you other investors feel.

I'm looking at buying 2 more rental properties(would become 3 rentals + 1 for my own home, for a total of 4 mortgages) and after running the numbers, if all 3 properties go vacant and I have to float the mortgages myself; it will be tight.

But at the same time, I understand that commercial investors have no WAY of floating the mortgage should something go awry.

What is your thought process for your own comfort level or risk?


There is a simple test to determine one's risk tolerance level.  You are overextended If you lose sleep over your investments.