When Should You Buy Rental Property?
Owning rental property is becoming one my favorite strategies for generating wealth. It’s simple, doesn’t require any specialized skills, and has both short-term and long-term benefits. Owning property is something everyone should do, and owning rental property is something everyone who’s interested in achieving financial independence should do.
And if you're new to buying rental properties, I would recommend house hacking first to test the waters (and potentially save money).
So when should you buy rental property?
You should buy rental property as soon as you can handle it financially.
“Handling it financially” means that if your rental property isn’t making money, you won’t struggle. Sure, it would be ideal to be debt-free, have a 20-25% down payment, and a hefty emergency fund. But I’ve found that in the real world (aka not the internet), the “ideal” scenario is rare for your average income earning American.
I believe that while you should work towards making your situation as ideal as possible, it’s more important to find a good deal. If you get good at finding good rental property deals and opportunities, there will be plenty of people willing to partner with you and provide money.
As long as you can use their money effectively and meet their expectations, using other people’s money is a great way to buy rental properties when you’re not in the position to afford the rental property yourself.