Home prices across the country have hit historic highs and people are beginning to feel that these prices might just push them out of the market. With that in mind, should one of your first homes be considered an investment property?
I think that all real estate should be considered an investment. Real estate in general, whether you plan on renting it out or living in it as your primary residence, is clearly an investment in your future and in your assets. Buying a home means you can actually use the asset while it is gaining equity for you. I know that many new homebuyers want their dream home right off the bat, but instead of finding the perfect home first, consider using your money to invest in a property that might give you cash flow income for years to come. Here are some basics to buying an investment property is your first home rather than your dream home.
More of a guarantee.
Young people, millennial's, and those just out of college probably have a lot of student loan debt. Couple that with car loans, credit card debt, and any other loans, and you'll find that more money is going out and being invested. This is why buying an investment property works so well. You can live in the home, use the asset, and still gain equity while paying off the mortgage.
The market is great.
The demand has outpaced supply for the past few years but you can take advantage of this as a new homeowner. By purchasing a distressed property or fixer-upper, you could do your own repairs and raise the value of your home to eventually sell above market value.
FHA and USDA loans are perfect for first-time homebuyers, especially on investment properties that don't need a lot of work. Buying a rental property with one of these loans means that they provide an immediate source of income or pay off any outstanding debt and save even more money in the long run.
Whether you choose to live in your investment property or not, starting off slow and investing in a property that may not be your dream home just yet, can help you toward a bigger down payment on a larger home later.
Give me a call and I would be happy to offer a list of investment properties ideal for first-time homebuyers, rental income properties, or what to look for throughout the Portland real estate market.