All Forum Posts by: Morgan Winslow

This question may be suited for a separate post...but I'm still a bit curious as to when the risk might be worth it in a similar situation. 

Ignoring all previous conversation, it's hard for me to think of a situation where worst case scenario I wouldn't be on the hook for close to ~50% of my income (Rent + mortgage w/o tenant). Is this the norm for investors starting out? I realize there is always risk but I'm trying to understand what an appropriate balance might be. The following are the options what I currently see 

1) Purchase quality property for rental and worst case I will be paying Rent + mortgage (~50% of income)

2) Purchase a much cheaper property...but not feel comfortable with its quality (~35% of income in worst case)

3) Wait a couple more years to get mortgage much lower. Or accumulate larger nest egg for worst case. I'm still young so this is definitely an option...But I'd enjoy starting sooner rather than later

Thank you all for the responses. I was having a lot of these thoughts in the back of my mind but it helps to see them from others.

@Chris Clothier

Sure. I have 2 people who have landed jobs in the area and are looking for a place to live starting next summer. An apartment for them is an option but would end up about the same price or more expensive than renting. And would have less sq ft. So a deal like this could be mutually beneficial in my opinion. I realize nothing is guaranteed but, assuming they don't get fired, they will be in the area for a while.

I will say that one of the people is a friend, and the other I do not know. I've heard to take caution when entering into something with friends so feel free to comment on that as well :)

Hi all, I'm looking at purchasing my first property and am looking for advice/thoughts. I would be purchasing a condo in the Dallas area and it would be a rental. The condo would be a bit out of my price range but would have guaranteed tenants for at least the first couple of years. 

My biggest hang up is that I'm currently, and would continue, living in an apartment. Assuming worst case, I could end up with a mortgage and apartment payments which would consume about 50% of my monthly income. I could technically make both payments if need be but it would be a big stretch.

Would this type of risk normally be considered a 'safe risk' when rental income is guaranteed or is this something to stay away from? Btw this is my first post so let me know if there is any more info I should include. Thanks!