All Forum Posts by: Tushar Desai

It's the end of the year and I am considering investing in a rental property as a first-time owner, who already owns a primary home. However, I am also thinking about whether I should max out my 401k like I did this year. The pros and cons of both options are driving me crazy!

I want to invest in SFH or a duplex in San Antonio or Raleigh (ok with neighboring cities). I am a first-time investor, and this would be an out-of-state purchase. I have done much research and narrowed it down to these two cities. I like Texas, but the only thing that holds me back is the higher property taxes compared to North Carolina.

1- Money: ok to spend ~300K (prefer to put only 20-30% down) and invest in a couple of properties than buying one in cash

2- Prefer cash flow (of course, appreciation would also be great)

3-Prefer SFH over duplex just because with SFH (in a good neighborhood), I probably would have less headache and drama

Here are my questions:

1- Which city do you invest in and why?

2- Would you consider any other city in NC or TX? Why?

2-Am I correct in thinking SFH has less headache over multi? if not, why not?

3- How would you spend the 300k for investment?

Thanks,

 I am in both cities pretty deep. And by Raleigh, I mean general Triangle(Durham, Cary, Apex).

I am very bullish both--clearly. $300k in San Antonio can go much further than Raleigh, so if you ever intend to scale it'd be more  practical in San Antonio. With that said, I think San Antonio  is like a small cap equity that is about to touch into mid cap and over time large cap. That's more speculation though. While I think Raleigh is a top 30% large cap equity that can hit the top 10%. That jump may be even larger and a bit less speculative given the investments there. 

I would prefer SFH over duplex-- in pretty much any area they appreciate better. Duplex works best if you're young, single, and can cost your lifestyle. I get the 1 roof, multiple tenants. You can do that with rent by the room, etc. Cash flow may exist slightly better in San Antonio, but if it does truly grow into a large cap city expect the property tax to start wiping it away. Cash flow shouldn't be the focus of your investment.

In regards to which city,  my advice would be to visit both twice. Stay in different areas, get a feel for it. Then see what your money can get you better in each city, and I'd prioritize the best location of the cities I could get in either. While doing all that you want to be interviewing property managers, etc., to see if you can form a team too.