Is it reckless to invest in my situation?

[Henry M.]

Hi guys, I'm absolutely as green as can be on the real estate world in general and property investing specifically. I was just spending my Sunday doing a little tinkering with my savings plans and thinking about my situation and stumbled upon this site.

Here's my situation.

I'm 25 years old, and have worked for the same company since graduating college. Thanks to a ton of hard work and great opportunities, I now make $120,000/year. Despite that, I'm savings-conscious and am living in a $950/month rental (very cheap for the upscale area of my city I live and work in), maxing out my 401(k), etc. My credit is roughly 789.

I have a small investment account that I'm building at $1,500/month. I'm considering taking most of it and tossing it toward a down payment on a 1 or 2 bedroom condo/apartment in my area.

I'd like to just put 10% down on something under $150k that's basically market-ready. Units in that range in my city typically rent for $1,500-$2,000/month. The mortgage payment, taxes, insurance, etc. would probably run me about $1,100-$1,250.

Given my personal budget allows for $1,500/month in savings, anyway (plus a discretionary allowance I could tap into if needed), I feel like I could handle vacant months without feeling the squeeze.

I would definitely use a property management service — the combination of my inexperience and my long work hours (often 70-90/week) means I am simply not the best candidate to manage property on a daily basis.

I'm not looking for supplemental income out of this. I want to use other people's money to make my savings potential grow faster. Potentially I could rent this place for 5 years or so and simply move in (advantages of being young and single ...). Or, if I have to take a new job at less salary, a pay cut at my current gig, or encounter other financial shortfalls, I could get out of my current rental and move into the unit I own.

How risky does my situation sound? And what advice would you offer?

Thanks in advance for your help!