Buying First Home - Forecasting

[Connor Wege]

My wife and I are currently renting a townhouse and our plan is buy our first home in about two years, once we have more money saved (about $20,000 saved right now). We felt that renting was the smartest decision right now considering the inflated housing market, rising interest rates, and not enough money saved for a significant down payment. We want to become homeowners and buy rental properties soon after finding a home to live in. I know that house hacking is a common strategy for buying your first property, but what other strategies would you recommend based on the financial position we are in? Would you wait until the market corrects itself to buy your first property? Do you think we have enough capital to look to buy a rental property now with little to no money down? Is the impending recession going to create more opportunities for better deals in the near future? What kind of financing would you recommend starting out? Any advice you can provide would be appreciated!

[Samuel Toma]

Hey Connor,

First I think it was wise for you guys to realize that renting was the best decision at this time. It is difficult when it feels like there is pressure to own your own home but I think there are a lot of situations where it makes sense to rent. My wife and I decided to keep renting for now because in the city we live in, if we bought a house it would more than double our living expenses, which would then greatly reduce the amount we could save and invest. 

I recommend David Greene's book on long distance real estate investing. I started looking in cities that were not too far but much more affordable. I ended up deciding Las Vegas was the best option and we ended up buying out first property last year. We put 28k down on a 140k condo and are saving up for our next property. 

I think if you wait depends on our goals, if you want to buy a small multi, then maybe you wait or prioritize getting a partner. If you just want to get your first property, then I would suggest research areas where you could get into with your budget. Good luck!