Your first personal home?

I mean home that you actually lived in and hung your hat. Did you guys treat it as an investment? Owner occupied multi-family, or maybe a renovation?

I’m just in a situation where I’m looking for my own personal first home. Having never bought a property before, I was wondering some ways you guys turned your living area into an investment property, or if you kept your business and personal dwellings separate.

p 1,
Don’t look for a single family home, look for a duplex or 2-on-1 (2 houses on 1 lot). That way you can have your cake and eat it too. You will have a home and an investment that you can easily manage as it is in your backyard. That rent will help with your payments, and you can write off on your taxes 1/2 landscaping, water, etc. That is huge.

Good luck and let us know how it goes in your search.

I turned my breezeway in to my office and work out of my home. At first it was great but it really has gotten hard for me to separate work time from home time, like work is always there. I suppose it would be better to do what furnishedowner says, get a duplex or 2 on 1, but I think I’m just the kind of guy that needs to go somewhere for work.

Or, if you bought very well back before the housing boom, you were able to buy low enough that you can now rent out the house and still cashflow. Like me! :biggrin However, I still need to live in it for 3 months to qualify for the 2 - 5 year rule of capital gains.


Yeah duplexes were what I was first considering too, and even talked my girlfriend into it. After looking at about a half-dozen though, none of them seem to be in places we’d like to live in. I mean, we make a decent living, and most of these duplexes are pretty run down. It’s not just paint and cosmetics either, but like sagging floors and ceilings, strange looking electrical connections, plumbing, or a variety of other potential problems.

This has led me into looking at single-family homes now, but I’m not really sure if living in a single-family home would be considered an investment.

My first personal residence was a fixer located in an historic neighborhood. I lived there six years and totally rehabbed the property. I then moved away in chase of my career and converted the property to a rental. I thought about selling shortly thereafter to take the small profit I had realized on paper but decided against it. Glad I didn’t sell because the neighborhood property values exploded a few years later. What I learned; you can create value from your own sweat equity, smart buying and owning a property at just the right moment when the market decides to move.

p 1,

Don’t quit looking! You have got to look at a lot more than a few in order to get a great deal. There used to be a rule in real estate: “you will hate the first house you buy because you are moving down”.

But you have the choice of either helping your landlord to pay off his house (really nice of you) or getting someone else to help YOU pay off YOUR house.

Enlist a Realtor in the search. Look at foreclosures. Also look at “For sale by owners (FSBO’s)” in the newspaper. There may be a guest cottage rental or mother-in-law quarters attached to a single family home that would make an attractive rental. Good luck searching and let us know how it goes.


Do all the rules basically stay the same though? As an owner occupied, would you still look for one side (assuming both sides were equal rents) to pay the mortgage, and the other for operating expenses? Should we still kind of look to cash flow $50-100 month, or do we just look to the other side as helping us offset a mortgage payment we are going to have either way?

Sorry for the barrage of questions.

Your personal residence is your home. It is the place you live in and call your primary residence. Anything else you buy that you won’t live in, but instead, use for the production of income is an investment.

The two are not always purchased with the same mindset. As a general rule, I don’t purchase anything for an investment rental that I would not live in myself. Not every property that qualfies as a decent rental property would meet my standards for a personal residence.

You do have to separate the two. Your personal residence is a liability in the sense that it takes money out of your pocket and does not generate any income. The accountants will tell you that your primary residence is still an asset because it has value and often appreciates over time. Appreciation does not put food on the table. Appreciation does not put money in my pocket each month.

Purchase investment properties with a business mindset and with specific investment criteria. You are not simply buying a rental property – you are buying the cash flow the property will generate. If it does not cash flow, then it is not a good investment. A bad investment property may still be a great personal residence.

Don’t confuse the two.

Maybe it would be helpful if you evaluated the numbers on your future investment duplex as if you were a tenant in 1 unit. Then you can say to yourself, “My rent is…”. But that rent will really be your mortgage, taxes, insurance–your fixed monthly payment MINUS the rent from the other unit.

Good luck, and let the experts on this site help evaluate your prospective purchase for you.


The answer to your question is Yes.

Every property I’ve ever purchased was bought because it was a good bargain and it had a lot of potential to appreciate.

A couple of the houses, I lived in for a very long time, and then made a packet of money when they were sold. Some of the houses, I lived in just long enough to qualify for the owner occupied exemption, and then made a packet of money when they were sold.

When you buy a house for your personal residence, buy smart. Look for a good bargain and think about how you will eventually sell it, who will buy it, how you will market it.

Almost always, my personal residence is purchased as a fixer-upper.

I wouldn’t pass on a good bargain because it didn’t need any work, but as a generalization, usually the really good buys need some work.