First property as investment while renting elsewhere...bad move?

[Jarred Mussen]

Hello BP community! I was wondering what the pro's and con's were to investing while renting and owning later? Basically, I'm curious to find out if I'm missing out on something by next making my very first purchase on a property as one that I would live in? Thanks, Jarred

[Christopher Brainard]

@Jarred Mussen

There are a couple different ways to look at this - generally speaking - the best solution is to purchase a multifamily property and live in one of the units. This gives you the tax advantages and lower interest rate of ownership while also breaking into the investment world. 

If you don't want to go that route and you're purely comparing owning your own property vs buying a rental, it comes down to lifestyle decisions and finances. While I don't know your market, here in Las Vegas, if you want to live in a high end neighborhood, you can find places that are going for 0.5% of the purchase price per month. If you buy investment properties, you can find ones that yield up to 1.25% of the purchase price per month.  While this is an oversimplified statement due to costs of running a rental, tax advantages of ownership, and the complexity of property management; you can essentially get twice the house for the same mortgage.

-Christopher