Investing while being a renter


Currently, we are renters and have a low monthly rent payment. If we purchase a personal home to live in, we will be spending an extra $500 per month. Are there any disadvantages in buying rental/income property while we are renters vs. buying a personal residence first and then proceeding with rental property. Our goal is to build up enough rental income to cover our monthly expenses. It seems that purchasing a home will just increase our monthly expenses by $500.

Thanks for your help!

First of all, have you considered an ARM or interest only loan for a lower mortgage payment?

It’s not like it’s against the rules or anything, but in the long-run why keep paying your landlord? Renting a house is just a liability, not an asset (that bad).

There are situations, however, where because of the market–like CA right now–where home values have skyrocketed, but rents have not kept up. So, from a cash-flow perspective, it may not make sense to own right now.

But then you need to ask yourself: Will you be in the same situation on your investment property? Meaning, will you be paying a $1000 mortgage and only getting $500 in rent? (I hope not!) If that’s the case, you’ll have to either invest in another area, or do something other than rentals.