Buying my first house- Wanting to rent out the basement

[Chris Dolce]

Hi Everyone,

I am 27 years old and wanting to buy my first house. I have always been cautious with my money and always want more of it. I live in Colorado (between Denver and Boulder). I currently rent and paying around $1600 all in. I do not want to rent anymore since I am wasting it away so I started looking to buy something and rent out the basement. I love the idea of a portion of the mortgage being paid off with the rental property. The houses that fit my description of what I am looking for are between $500-550k. I make around $120k a year and I can cover my mortgage fine without renting the basement out but I want the extra income. I have a realtor friend suggested I only put down %5 because of the interest rates being so low.

The question I am asking is $500k to high? Should I put more money down? In my mind its to expensive but I only think that because I have been cautious in the past. Any feedback would be appreciated!

[Jacob Stewart]

@Chris Dolce

Typically you want to cover 20% to get out of mortgage insurance and give you a better loan to value ratio, but that's just advice I've gotten. My house I only put 3.5% down but it was a serious fixer upper (20k) I absolutely agree interest rates are amazing right now. Keep in mind the markets due for a shift (not like we can time when). I am always a fan of house hacking. If you have more cash for more properties 5% is fine for personal property I think. I would leverage as much money as you have and buy as many rentals as possible with a bit in savings to counter expenses. Plant a ton of trees now and it will thank you later. Now's the time to scale!