Fiancé and I are trying to buy our first house

[Ethan Fowler]

Hello,

I am in the process of house hunting with my fiancé. Originally, I really wanted to purchase a multi family so we could live in one unit and rent the others out. I have come to realize that she really would prefer a single family home and keeps pushing the "cute" homes in our area. The only issue is they are quite expensive and produce no income while we live there. I don't think we would have a huge problem just buying a rental property after we purchase a single family home but, it feels backwards to me. I feel like it is better to purchase income producing property to help us afford a single family home in a couple of years. How have people in this community approached this dilemma and what was your solution/outcome?

I also considered that we could buy a single family home which needs some work so we could at least build some forced equity through renovation which seems like it might check both boxes for us but, we don't necessarily want to live in a construction zone. 

Thanks!

Ethan

[Dan Guenther]

@Ethan Fowler - Welcome to the BP community! 

It's not uncommon for couples to face such dilemmas during the house-hunting process, especially when it comes to the investment side. Here's my 2 cents: 

1) Open and Honest Communication: The first step is to have a candid conversation with your fiancé about your differing perspectives. Try to understand each other's motivations and concerns. This will help both of you find common ground and potentially reach a compromise.

2) Financial Considerations: Evaluate your financial situation together. Discuss your long-term goals, such as homeownership, generating income, and building equity. Consider the financial impact of each option, including the costs of purchasing a single-family home, potential rental income from a multi-family property, and the costs of renovation. It may be helpful to consult with a financial advisor to get a clearer picture of the financial implications. For me, I've found that showing some actual numbers and projected returns on a given investment can be really helpful when pitching the idea of investment to a significant other that might be on the fence. 

3) Compromise: Look for potential compromises that can address both of your desires. For example, you mentioned the possibility of buying a single-family home that needs some renovation. This could allow you to build equity while still living in a comfortable space. Alternatively, you might explore the option of purchasing a single-family home with a separate unit, such as a basement apartment or a guest house, that could generate some rental income. This is a strategy that works very well in Colorado. I've even helped couples get into their first single-family investment with a newborn using this strategy!

4) Long-Term Plan: Consider your long-term goals and how each option aligns with them. If your primary objective is to build wealth through real estate, purchasing a multi-family property might be a better fit (this can also be very tricky here in CO where multi-family prices are very high). However, if your goal is to create a comfortable and stable living environment for your family, a single-family home could be the right choice. Remember that these decisions are not permanent, and you can always reassess and make changes in the future.

5) Future Investments: If you decide to go with a single-family home that doesn't generate income initially, discuss the possibility of investing in a rental property later on. You could create a plan to save and invest in income-producing properties to help finance your future goals, such as upgrading to a larger single-family home. Investing is a long-term game so make sure to be patient with your goals, trust the process, prioritize your family first and the money will eventually come. This has always been a hard one for me as tend to want to get to my goals ASAP! 

Good luck to you on the journey!