148: Rookie Reply: Should You Buy a Rental Before Buying Your Primary?

Real Estate Rookie

This week’s question comes from Brandon through Ashley’s Instagram direct messages (follow her @wealthfromrentals). Brandon is asking: I live in a great neighborhood where my rent is less than a potential mortgage. I’m looking to invest in a different town experiencing great growth, but I would live there myself. Is it a bad idea to purchase a rental property before purchasing my primary residence?

Both Ashley and Tony had to ask themselves this same question as they started their real estate investing careers. While they took different approaches, in the end, they both agree that this decision is far more subjective than many people think, and it will entirely depend on your family plans, cash flow, and net worth calculations.

Here are some suggestions:

Ask “will this home purchase contribute faster to my cash flow or net worth goals?”

Decide on the importance of having a “home base” in your name

Understand how your financing options may change after buying the property

Calculate how long it will take you to invest/buy your primary after your purchase

Make the decision through a five-year lens

And more in the episode…

If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).

Links from the Show

Real Estate Rookie Rookie Facebook Group

Real Estate Rookie Youtube Channel

Check the full show notes here: https://www.biggerpockets.com/rookie148

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