60% Leverage as a Principle

[Zachary Hutchinson]

So I’m saving up to buy my first rental in 2020. I have a wife and a kid on the way, and I’m a newbie. I’m currently writing down sort of a 5-year rental property plan, and I want to hear your thoughts on a principle I’m considering for risk management.

Never be more than 60% leveraged on any property that can’t be supported by your personal income.

This will allow me to buy a rental property next year, in two years I'll reuse my VA loan to buy a multifamily and house hack as we transition out of the military and to a new city. Then I might have to sit and save for a while to stick to this 60% rule.

What are your thoughts? Is this reasonable or too risk adverse? Will this principle impede my progress by a few years or a few decades?