Buying a home vs investing in rentals
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.
Most Popular Reply
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.
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