Should I buy a rental property or put more money down on my primary residence?
I just sold my house in California (thankfully) and have about 150 grand to spend. I’m looking at moving into a new 125k house, but I’m thought of getting a leasing property and allow that to help offset my mortgage. Taxes are 2.7% here for real estate. I make about 100G’s a year, 42 and I live alone. Not sure about the hassle of leasing property though.
Best recommendations are:
(1) Do your homework about owning leasing property – its not for all. Some people like it and others despise it.
(2) Choose what your long-term goals are, if its to retire soon, then maybe you want to start getting comfortable and buy your primary home, if you intend on working for about another 20 years, then maybe leasing property is surely the way to go
(3) Speak with your financial planner, current leasing property owners, this will help give you some more adept perspective.
Best of luck to you!
Read a couple of books on land-lording before you do it. Some people are not cut out for it. Make sure if you are buying a home to rent that you are in an area that is desirable for renting (if there is a institution or large corporation that relocates people in the immediate area). Mortgages on investment property can be up to 2% higher appeal than primary residences.
Spend 30K on new home 20% down + closing costs. Keep the other $120K honestly liquid for a even as in the even of unemployment unless you have a very very healthy Emergency Fund already.
I recommend you keep a small mortgage on your primary residence for the deductions. See an accountant for your other questions. It sounds like you have the right thought, though. Excellent luck..