Investing while renting

2 Replies

I’m coming up on two years in my current house, and will be ready to sell at that time (to avoid capital gains tax). With that, I’m looking to put a good chunk of the profits back into an investment of some sort... open to multi or single family options.

My question is around my primary residence post sale of my current home. So far I’ve bought two houses and used them as slow flips to generate some return. I have heard schools of thought, although not many, on the idea of renting your primary residence with investing in property that you don’t live in.

Does anyone have a take who has experienced this, and can provide some logic around why it may be better or worse to own both your primary residence and of course have a rental portfolio?

Thanks in advance!

Brandon

Hey Brandon, I've been renting for almost my entire investing career (~9 years). Reason being, I live in the bay area of CA where it is super expensive to own a primary residence. While rent isn't all that much cheaper, I don't have to tie up a huge chunk of change as a down payment, and thus have been purchasing property out of state like it's going out of style. If you do the actual math on the true costs of home ownership, it usually* doesn't pan out as a better investment than renting. I put an asteric there because of course, there are scenarios where it makes total sense. You have to run the numbers for yourself and your specific criteria and see what makes the most sense for you. But I can tell you from experience, I'm so glad I didn't purchase a primary residence while I was growing my rental portfolio, it would have been a pretty big slow down for me.  

@Michael Albaum , thanks fir the feedback! The down payment is the biggest factor in my mind at this time, so I’m glad you mentioned that. My understanding at this point is, the bigger factor with owning the investment is the cash flow, not necessarily the 30 years from now it’ll be paid off. Obviously having it paid off would be awesome too, but the dash I could save by not dumping it into a down payment and closing costs may be beneficial in the long run...

Thanks again for the feedback!

B