Buy Primary Residence vs Rent & Invest
Hi All,
So for background context, wife and I live in Orange
County, CA. We rent an apartment for $3,450 and have enough saved for a
down payment on a house. Our lease ends in December so I'm trying to
start brainstorming and think ahead to different options.
My
question to everyone is would you use the money as a down payment for a
SFH that we'd live in and secure a primary residence? Or would you
continue to rent and use the money to buy other properties/investments?
Thanks,
- Investor
- Shelton, WA
- 6,795
- Votes |
- 6,525
- Posts
If it were me and the way things are I'd continue to rent, put the cash into a high yield savings account and sit in the sidelines for a while. Meanwhile I would be sure I knew how to underwrite-forget spreadsheets and master the fundamentals instead. Know where to get the right numbers-they are not in a seller's pro forma or in a listing. All the best!
Quote from @Michael M.:
Hi All,
So for background context, wife and I live in OrangeCounty, CA. We rent an apartment for $3,450 and have enough saved for a
down payment on a house. Our lease ends in December so I'm trying to
start brainstorming and think ahead to different options.
Myquestion to everyone is would you use the money as a down payment for a
SFH that we'd live in and secure a primary residence? Or would you
continue to rent and use the money to buy other properties/investments?
Thanks,
If you buy your house first you will likely knock yourself out of being able to finance a rental due to debt to income ratios being outside what a lender would want. (besides the lack of additional down payment.)
Your “optimal play” would be to buy a duplex with only 3.5% down and live in one side for at least 6 months (which is the requirement to qualify for the “ owner occupied” 3.5% rate.) and use the rental income to help save up additional money Then after 6 months (or later) you could move out of the duplex, rent both sides and buy another owner occupied home to live in that you prefer (again for the 3.5% down.) Your rental income would help offset your mortgage expense of the duplex and help you qualify more easily for the 2nd house.
It just depends if you are willing to go that route?
Randy