Investment Property or Private Home?

Question

In 2008 I am looking to buy property (I'm currently renting). Do you think it is wise to buy my first property as an investment property (2 / 3 flat building) opposed to buying a town home?

Answer 1

This is a good question, I believe that the investment property is the best way to go if you have the temperament to have three jobs at one time.
1. You need to work at your profession.
2. You will be landlord with tenant complaint and property complaint.
3. Also you will be business manager with societal responsibilities.

The real object is to acquire property, pay it off and move ahead within the limit of our income. I suggest that you buy foreclosure property as a first property ownership. Usually you can acquire a property at 20% to 40% below market value. 1 getting it for zero down and without a down payment. 2 saving time, why pay rent for a year and a half when you can pay a mortgage and build equity. Remember the best real estate to buy comes with an equity stake.

If your mortgage is $100,000 and the property value is $175,000 - although you can not afford to pay $856 per month mortgage + $100 per month insurance + $197 per month real estate tax. Water, Heating, Telephone, Electricity equal $365 - $480 per month, ownership permit you to have tenants which can add to your income.

Answer 2

Keep in mind that with ownership comes expenses. And that is true for investment and private occupancy.

If you buy for yourself, you will need to make sure that you can afford the mortgage, utilities, regular expenses and have money left over for other things, preferably savings.

If you buy an investment property and your payments are $1000, you would need to be sure that you charge enough rent to cover repairs when and where needed including maintenance.

The two should be considered separately of each other. You can NOT rely on income from your rental units until your second year when ALL leases are renewed. The rental unit is a business.......all income should be used to further the business...maybe to buy more units....only pay yourself after you are in reliably into positive numbers. Another thing....if you can obtain enough units, you can leverage your equity to purchase other units and build up your empire. Your riches will be ONLY on paper until you have enough excess income.

you could use one of the units as your residence for a while until you gain enough equity/cash to purchase another property for yourself..........just a point of view.....

Answer 3

purchase your private home first.
there are some benefits given to first time home buyers that you would give up if your first home is for income purposes.