Buying a home vs investing in rentals

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Buying a home vs investing in rentals

Orlando Chavez
Member since 2024 · 5 posts · 11 votes

hi all. Just looking for advice and currently weighing the pros and cons of buying a home vs investing in a rental property. 

Here is our situation. We are relocating to the Tri Cities, WA in the spring/summer. With current house prices, it makes sense to buy a home since the estimated mortgage could be roughly $2500-$2800 (assuming 3% down, 30 years, 6.5% interest. Rents for a similar house could be around $2200. We would like to buy our first home and potentially learn how we could use equity to fund future rentals. 

On the other hand, we wanted to make our first out of state rental investment next year since that was the original plan prior to making the last-minute  move. 

So we’re just trying to decide what would be a smart move: buy our first home, build equity, and fund our first rental property or go straight for the rental property while we pay someone else’s mortgage (rent). 

Your thoughts are greatly appreciated. 

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Kerlous TadresBusiness Member
Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
9mo

Hey @Orlando Chavez I'd house-hack first if you're buying anyway, get a duplex/triplex or a home with a rentable basement/ADU, and have tenants cover most of your payment. That lets you live cheaply while you build reserves and learn landlording, then you can move out and keep it as your first rental. If you can't find a setup that makes the monthly feel light with tenants in place, I'd rent and keep your cash for the rental purchase.

[email protected]614-490-1163
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  • Jules Aton
    MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
    9mo

    You could purchase a house that you will live in for a while and then would make a good rental? That generally isn't exactly our dream home but the pay off can be solid. While goals are important often we get stuck with a plan that is no longer practical due to unforeseen circumstances. 

    0Reply
  • Kerlous TadresBusiness Member
    Realtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
    9mo

    Hey @Orlando Chavez I'd house-hack first if you're buying anyway, get a duplex/triplex or a home with a rentable basement/ADU, and have tenants cover most of your payment. That lets you live cheaply while you build reserves and learn landlording, then you can move out and keep it as your first rental. If you can't find a setup that makes the monthly feel light with tenants in place, I'd rent and keep your cash for the rental purchase.

    [email protected]614-490-1163
    Kerlous Tadres | Reafco Real Estate541 Reviews
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    1Reply
  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    9mo

    Others above have mentioned good options. I would lean on a 2-4 unit or a single family where you can do an ADU situation. If rent is cheaper then I would argue to do that BUT house hacking a multi family will get you in a place while getting your investing journey going. You can live in a single family then move out down the road but putting low money down makes that tough to pencil.

    0Reply
  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    9mo
    Quote from @Orlando Chavez:

    hi all. Just looking for advice and currently weighing the pros and cons of buying a home vs investing in a rental property. 

    Here is our situation. We are relocating to the Tri Cities, WA in the spring/summer. With current house prices, it makes sense to buy a home since the estimated mortgage could be roughly $2500-$2800 (assuming 3% down, 30 years, 6.5% interest. Rents for a similar house could be around $2200. We would like to buy our first home and potentially learn how we could use equity to fund future rentals. 

    On the other hand, we wanted to make our first out of state rental investment next year since that was the original plan prior to making the last-minute  move. 

    So we’re just trying to decide what would be a smart move: buy our first home, build equity, and fund our first rental property or go straight for the rental property while we pay someone else’s mortgage (rent). 

    Your thoughts are greatly appreciated. 

    Hey Orlando, welcome to BP! It sounds like you’re weighing the classic first-home versus first-investment dilemma, and honestly both paths have pros. Buying your own home in the Tri Cities could be smart since your mortgage is close to the local rent, which means you’re essentially building equity for yourself instead of paying rent, and down the line that equity can be tapped to fund rentals. Going straight for a rental property out-of-state can be great too, especially if cash flow is king for you, but it comes with more moving parts—finding a property, managing it long-distance, and dealing with a market you’re not living in. One strategy that’s worked for a lot of people, including out-of-state investors I know in Columbus, Ohio, is buying your first home to get comfortable with real estate and build equity, then using that equity to step into cash-flowing rental investments in strong markets like Columbus where you can find deals hitting the 1% rule and positive cash flow in the $120–180K range, plus the macro story is solid with population growth, job growth, and big companies moving in, so long-term appreciation potential is real. Happy to connect and answer any questions you have!



    [email protected]614-300-7535
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  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 948 votes
    9mo

    @Orlando Chavez

    Both paths can work, but clarity comes from separating lifestyle from investing. If buying a primary keeps your payment comfortable and you’ll stay put a few years, it can be a solid base. Just don’t stretch so far that it kills future investing.

    Many investors keep the primary conservative and invest elsewhere, especially in Midwest markets where entry costs are lower, cash flow is stronger, and deals don’t rely on appreciation to work. That often lets you build rentals and experience faster while preserving flexibility.

    [email protected]614-418-6081
    0Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    9mo
    Quote from @Orlando Chavez:

    hi all. Just looking for advice and currently weighing the pros and cons of buying a home vs investing in a rental property. 

    Here is our situation. We are relocating to the Tri Cities, WA in the spring/summer. With current house prices, it makes sense to buy a home since the estimated mortgage could be roughly $2500-$2800 (assuming 3% down, 30 years, 6.5% interest. Rents for a similar house could be around $2200. We would like to buy our first home and potentially learn how we could use equity to fund future rentals. 

    On the other hand, we wanted to make our first out of state rental investment next year since that was the original plan prior to making the last-minute  move. 

    So we’re just trying to decide what would be a smart move: buy our first home, build equity, and fund our first rental property or go straight for the rental property while we pay someone else’s mortgage (rent). 

    Your thoughts are greatly appreciated. 

    Hi Orlando, for out of state investing, I would advise looking into the markets with stable cash flow and also a growing area. You'll also need a good PM to manage the units.  Happy to share my experience and connections.

    [email protected]614-363-2787
    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
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    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    9mo
    Quote from @Orlando Chavez:

    hi all. Just looking for advice and currently weighing the pros and cons of buying a home vs investing in a rental property. 

    Here is our situation. We are relocating to the Tri Cities, WA in the spring/summer. With current house prices, it makes sense to buy a home since the estimated mortgage could be roughly $2500-$2800 (assuming 3% down, 30 years, 6.5% interest. Rents for a similar house could be around $2200. We would like to buy our first home and potentially learn how we could use equity to fund future rentals. 

    On the other hand, we wanted to make our first out of state rental investment next year since that was the original plan prior to making the last-minute  move. 

    So we’re just trying to decide what would be a smart move: buy our first home, build equity, and fund our first rental property or go straight for the rental property while we pay someone else’s mortgage (rent). 

    Your thoughts are greatly appreciated. 


     Are you willing to do a house hack?

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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  • Sam McCormackBusiness Member
    Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
    9mo
    Quote from @Orlando Chavez:

    hi all. Just looking for advice and currently weighing the pros and cons of buying a home vs investing in a rental property. 

    Here is our situation. We are relocating to the Tri Cities, WA in the spring/summer. With current house prices, it makes sense to buy a home since the estimated mortgage could be roughly $2500-$2800 (assuming 3% down, 30 years, 6.5% interest. Rents for a similar house could be around $2200. We would like to buy our first home and potentially learn how we could use equity to fund future rentals. 

    On the other hand, we wanted to make our first out of state rental investment next year since that was the original plan prior to making the last-minute  move. 

    So we’re just trying to decide what would be a smart move: buy our first home, build equity, and fund our first rental property or go straight for the rental property while we pay someone else’s mortgage (rent). 

    Your thoughts are greatly appreciated. 


     Househack 100%. Unless there are special scenarios are present

    [email protected]859-443-4952
    Sam McCormack Realtor
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  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    9mo

    @Orlando Chavez
    I would buy a home or do a house hack before investing out of state

    [email protected]614-412-4565
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  • Aaron ZimmermanBusiness Member
    Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
    9mo
    As others have mentioned, house hacking is the way to go if you can. You get the benefit of having a lower down payment and ideally reducing your housing expenses. In your area, are there many 2-4 units available? Its going to be more difficult to get into the property as an investor because you’ll need 25% down if you don’t only occupy (typically)
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  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    9mo
    Quote from @Orlando Chavez:

    hi all. Just looking for advice and currently weighing the pros and cons of buying a home vs investing in a rental property. 

    Here is our situation. We are relocating to the Tri Cities, WA in the spring/summer. With current house prices, it makes sense to buy a home since the estimated mortgage could be roughly $2500-$2800 (assuming 3% down, 30 years, 6.5% interest. Rents for a similar house could be around $2200. We would like to buy our first home and potentially learn how we could use equity to fund future rentals. 

    On the other hand, we wanted to make our first out of state rental investment next year since that was the original plan prior to making the last-minute  move. 

    So we’re just trying to decide what would be a smart move: buy our first home, build equity, and fund our first rental property or go straight for the rental property while we pay someone else’s mortgage (rent). 

    Your thoughts are greatly appreciated. 

    House hacking would be a great option for you.
    0Reply
  • Benjamin AakerPro Member
    Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
    9mo
    House hack before buying out of state. Building equity in your current property is a great idea until you are ready to get started.
    1Reply
  • Camren BerryPro Member
    AZ · Member since 2021 · 86 posts · 14 votes
    9mo

    Hey Orlando, I can tell how much this is weighing on your mind. Buying your primary first can make sense if you want stability and long-term equity you can later tap for rentals, especially since your mortgage vs rent difference isn’t huge. That said, some investors prefer to rent and invest their cash in a market where the numbers work better immediately. I actually work with a lot of new and long-standing investors that are trying to build their rental portfolio with no capital upfront. Either way, you’re in a great spot, and really, it just depends on what matters most to you right now.

    [email protected]480-818-6158
    0Reply
  • Chris Romany
    Orlando, FL · Member since 2014 · 93 posts · 35 votes
    9mo

    Orlando,

    I think you need to carefully consider why you are buying the property. Are you looking for a home or build an investment portfolio? Sounds simple but the two are different.

    If being in your own home is of primary importance, then you don't want to house-hack; living with a tenant above you or next door can be quite stressful if you are not 'built' to handle it. Buy a home that you both love in the area that you want, while aiming for a fixer-upper so that you can add value and build equity faster. Your return on investment will be in the long term if/when you decide to move.

    If you are committed to real estate as an investment option (as opposed to looking for a home), then living in a two-story or on one side of a duplex/quad will be the way to go. Your tenants will not only pay your mortgage but you will have returns in the short term in the form of Cash Flow.

    Best of luck in your relocation,

    Chris

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