24 years old, 35k a year but good saver - do I buy a property?

Question

I am 24 years old currently making 35k a year living in New Jersey. I don't make a lot of money but have managed to save 17k in a little less than 2 years. I want to invest in a multi family property but am hesitant to do so considering New Jersey is very expensive, I am a young female (this may be a problem when dealing with renters) and my future is very much so undetermined as I am just starting out in the "adult world."

I have done research but am still on the fence about how much to have in the bank before purchasing a rental home. I have heard it is recommended to have at least 50k (or absolutely nothing depending on who you ask).

Did anyone else start out young and a little unstable when buying real estate? Thanks!

Adam Burns · Answer

If I had the opportunity to have a conversation with 24 year old me, I would advise him to do a house hack. You can use your savings to put a down payment, then have your mortgage paid down by someone else while having your house gain appreciation all the while you are living there for free.

Ellen O'Neill · Answer

• @Aaron Hunt Thank you! I have to admit, having my mom as my roommate has really helped me in the savings department lol. It allows me to save the money that I do. 
• @Adam Widder I agree! My boyfriend is a plumber so i've been trying to learn the basics in hopes that my knowledge will come in handy later down the road. 
• @Adam Burns I have looked in to this - I'm thinking that when it is time to move out that this would be the best way to do it. Thanks!
• @Andrea Ives Thank you! And so happy to hear that there is another young girl out there looking to save her pennies and invest smartly. I wish that I had been on top of my game and done that while I was in college. Best of luck & thanks for the advice! 
• @Odie Ayaga I have been thinking of looking in PA. I've just been told that your first investment home should be as close as possible which is why I've been hesitant but I think I should really start looking into it. Thank you! 
• @Brendan Markle Thank you! & tell me about it. It's really a killer for someone just starting out. You are the second to suggest PA so I think I will begin looking into it. I will definitely let you know if I have any questions. 
• @Caleb Heimsoth Thank you for being honest! I wasn't sure if I was being negative or realistic. 
• @Miguel Dormany We need more people like you in the world! Thank you for the kind words. I also have been thinking of partnering up with someone in hopes of speeding up the process without being irresponsible and finding myself in a financial pickle.

Thank you all for the responses. They were all extremely helpful and uplifting. Have a great day everyone! :)

Andrea Ives · Answer

Hey @Ellen O'Neill I am 22 and am in a similar situation. Definitely getting a lot of different  opinions which is both a good and bad thing! For myself personally I am looking for a duplex which I will house hack. Not only will I rent out the other unit but also rent out the rooms on the side I will live on to girls around my age. Luckily there are quite a few colleges in my area so finding responsible girl tenants is not hard.

I agree with the other users try to house hack because you can use a FHA loan put 3.5% down and even after closing potentially have a good amount of money left in the bank. Cheers!

Brendan Markle · Answer

Property taxes in NJ are a killer, maybe consider jumping ove the bridge and buying in Philadelphia ?  There are definitely duplexes that cashflow that you could afford with that money.  I'm a local investor/Realtor, let me know if you have any questions

Odie Ayaga · Answer

Good on you for starting early @Ellen O'Neill and you as well @Andrea Ives. There's a lot of interest in PA for people in Jersey so consider that an option as well. It also will help to narrow down your desired locations and property types (duplex, triplex, quadplex, etc).

Adam Widder · Answer

I would do what the man above mentioned.  House hack, find a duplex or SFR and have friends or a tenant move in.  If you have a handy uncle / friend / father who can help teach you some of the remodeling skills, that's even better.  It'll help down the road when you do not want to remodel but you'll know what needs to be done and a contractor can't try to fool you just because you're a woman.  You'll have the experience to call BS on whatever they try to tell you needs to be fixed.

Aaron Hunt · Answer

That’s awesome to be able to save up 25% of your income, while living in the NYC area. Tough to do!

I have friends making significantly higher incomes in that region (late 20s/early 30s) who are not able to save a penny.

Sounds like you have the discipline. Young/female is all relative. You just gotta learn and own it. Just because you’re someday going to wake up and be 30 doesn’t mean people will be nicer or easier to deal with.

Beyond that, depends on your current market, and what is available. You’ll need to put in some leg work on that and start analyzing individual deals out there. Eventually it will click as to what opportunities make sense. Also NJ kind of stinks because of property taxes being crazy.

Your other option is to consider buying an SFR and just renting rooms in your home to roommates, in case you can’t snag a multi-family.

Shane H. · Answer

@Ellen O'Neill How is the search going? Have you decided to house hack with a SFR or buy a MFHfarther away from where you currently live?

Calvin Lipscomb · Answer

Congrats.  As a finance person I tell people all of the time that it can be done.  I personally KNOW many of young people in your exact situation and making more but, has nothing saved.  I figure out 2-3 of your main priorities and work your plan around that.  Do you want live in the property?  How does the location of the property impact your employment?  What is the ultimate goal in purchasing the property?

Miguel Dormany · Answer

Hi @Ellen O'Neill and welcome to BP. Don't let that you are a girl and young stop you. Go for your dreams! You can work on your own or see if you can find a good investor and help/join with them and grow. Don't sit back as most people do and wait till tomorrow, or the next day, or next month, or next year, etc. Learn and go for it. You only live life once you might as well live it the way you want to. Good luck to you

24 years old, 35k a year but good saver - do I buy a property?

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