rent go into mortgage or buy vacation condo

[Nathan Florence]

hey guys, new member here, based in hawaii, find myself in a situation wondering which route to go

Started my real estate journey in march 2020, bought a rare vaca legal condo in hawaii, got lucky and killed it with that as far as home prices having doubled since then here in hawaii as well as crack down on residential airbnb funneling more people to legal vaca rentals. 

airbnb covers its own mortgage (2000) plus another 2000 of my 3500 rent

wondering wether i go for A another condo and more cash flow or B go for a residential single fam i can fix up and live in, cutting rent out and gaining equity instead of paying someone elses. 

new mortgage on single fam here would probably be 5500

thanks any and all inputs! 

[Nathan Gesner]

Quote from @Nathan Florence:

Welcome to the BiggerPockets forums!

My recommendations?

1. Do not use the cash flow from your investment to pay your rent. You should be paying your own rent or mortgage. If you want real wealth, you need to invest your cashflow right back into more investments. Continue to grow until you've reached your goal, then you can enjoy the spoils.

2. Do not spend $3,500 on rent! Cut your expenses and maximize momentum toward your goals.

3. Instead of buying an expensive single-family home, consider downsizing to a small apartment building with four units. Live in one and rent the other three out. Or buy a large single-family and rent out individual rooms. Find a way to turn your primary residence into another investment.

4. Don't get a big head and make the mistake of over-extending. You got lucky with this purchase. Educate yourself on how to make wise investments and how to properly manage your investment so bad Tenants don't ruin the experience. Learn why it's paying down the mortgage is actually a loser option. Learn how to cut expenses, increase income, and invest wisely. We are in a peak market so anything you buy today may drop in value by 10% or more in the next year.