Question: Hello, this is Ken and I was wondering, can a first time buyer purchase a rental property?
All right, so we’re talking about buying your first property as a primary residence versus your first property as a rental. I’ll start with the loan side. So the major differences are down payment and rate, right? So on a primary residence, you can put a smaller down payment. That’s why most people start as their first home with a primary residence as a rental property, you’ll need a bigger down payment and a little bit higher of an interest rate. But other than that, if you can find an investment property that’s a little cheaper, that might be a good way to get your first real estate.
On the real estate side numbers, actually in particular, most people think if you buy the investment property first before the home, that you want the idea maybe you’re doing this all for is that you’re cutting off your nose in spite of your face because you exhausted all your resources for the down. You can’t afford two mortgages. Well, here’s the cool thing.
Let’s say you do get that investment property first, right? So firstly, you can use the rents from that to help qualify for income so that doesn’t suck. Secondly, they’ll let you they, meaning your future lender, will let you use 75% of those rents to offset that debt so that you’re basically ah, almost to parity to just qualifying for your, you know, future trophy family home. So you can property ladder without having to sell that investment to get the one you want. Yeah, you can do both. Good point.
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