Hey first-time home buyers! If you’re thinking of jumping into the property market, have you considered buying an investment property as your very first purchase? It might sound a bit different, but let’s break it down into simple words so you can see if it’s right for you.
Pros:
- Money coming in: Instead of just living in your house, you can have someone else pay you to live there! This is called “rent”. If the rent covers your mortgage payments, you could be living somewhere else while someone else helps you pay off your new home.
- Tax Benefits: There are some cool tax breaks for property investors. Think of it like a discount for things like repairs or even some of the costs you pay when buying the property.
- Building Wealth: Over time, property values usually go up. So, if your home becomes worth more than what you paid, and you decide to sell, you make a profit!
Cons:
- Being a Landlord: This means you’re in charge. If something breaks, your tenant will expect you to fix it. And if they don’t pay rent on time, you have to handle it.
- Costs: Buying a home has costs like taxes and insurance. Plus, if you don’t live in the home and something goes wrong (like a broken pipe), it might be harder and more costly to fix because you’re not there all the time.
- Market Risk: House prices don’t always go up. Sometimes, they might even drop. It’s a bit like a seesaw. So, there’s a risk you might not make as much money as you hoped.
Benefits:
- Flexibility: You can live somewhere else that suits your current needs, while still owning property.
- Learning Experience: It’s a great way to learn about the property market and being a landlord, without the pressure of your own home being on the line.
If you want to set yourself up right for the future, start with a multi family. You can later keep it as an investment and use the income you are generating in rent to help you qualify for a single family home.
So, what’s the verdict? Buying an investment property as your first home has its ups and downs. It might be a fantastic way for you to dive into the property world and grow your money. But remember, always do your homework and chat with experts before making any big decisions. Happy house hunting!
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