Need a home but also want to start real estate investing.

by Shari Francis
(Moving to ON from NS soon.)

Hello

I am very interested in real estate investing and I have been doing some research on this before going ahead with it.

I want to start investing within the next two years.

I'm 22 years old and I have a job that pays decently about $50,000/yr. I still have some some student debt but I should have it paid off in about six months.

After that I will have about $900 month extra. I intend to save money to start investing in properties however I don't own a home (or car) and it wouldn't be sensible to buy a home I intend to rent when I don't have a place of my own.

I don't think the bank would lend me enough money to buy a duplex or a home big enough to rent out a portion of it.

So my question is this; how do you suggest I get started in real estate investing, given the situation of needing my own home?

Most of the articles I read on real estate investing assume that a person is somewhat settled, but I've not come across any articles advising people in situations similar to mine.

I haven't gone through all your articles on about.com so I apologize if the answer to my question is somewhere in there but if you could please point me in the right direction I would appreciate it.

Thank You

Shari Francis

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Feb 04, 2010
When is the right time to start real estate investing?
by: Tom Karadza

Hi Shari,

I can't believe you're already thinking this way. Super smart! Nick started investing by himself with his own cash at 21 and to see you already thinking this way is amazing.

The buy versus own debate will rage on for years. There's volumes of books written on this debating the pros and cons.

My personal preference is to own my own castle. Meaning, purchase the place you live. Others will argue that you can save money on maintenance and property taxes by renting and you invest the difference.

From experience, I personally don't know anyone disciplined enough to actually take the money they save by renting and invest it.

For that reason I'm a believer in buying your own property. This is of course my personal bias.

I think you are very smart in thinking about renting out part of a property you buy. I know many people who have roommates and that extra income really helps create extra cash flow to save up for a down payment on an investment property.

But if you don't like the roommate thing then I wouldn't discount qualifying for a duplex. Depending on your credit and where you're living in Ontario you may be able to qualify. I would strongly encourage exploring that option further.

And if you discover that you really can't qualify for a duplex then again my personal opinion is to buy your property before you begin investing.

Others may disagree with this and I really want to tell you to start investing first but I personally believe in owning the place you live.

I would really explore the idea of a duplex as much as possible though. If you could qualify that would be the perfect combination.

Hopefully this doesn't confuse you more than help you!

Tom.

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