Is buying a home to live in a smart move as a first investment property?
Many would argue that a residence is not a true investment at all and that all real estate investments must be managed like a business. On the other hand Warren Buffet names his own residence as one of the best investments of his lifetime. Both of these views are essentially correct.
Buying a home could easily be one of the best investments you will ever make. Providing of course you buy smart, borrow smart and don’t bleed your equity for other things.
What to buy? The old advice about purchasing a multifamily property like a duplex or triplex still remains a smart move for first time home buyers. You first home doesn’t have to be and often shouldn’t be your dream home. Use it as a tool to work towards that. Also remember that no matter how attractive buying a home is right now or how much you need to invest you need to make sure you have some liquid savings set aside first, at least 3-6 months’ worth of expenses.
It can also be a very wise move to go through the process of buying a home yourself first before doing it purely for profit too. Otherwise you could make the most expensive makes when you really can’t afford to. It will help you negotiate, borrow and sell future investment properties with more confidence and accuracy.
Those planning on becoming full time real estate investors may also find it awkward, advising others and networking when they have never experienced buying a home for themselves either.
You should absolutely buy a home of your own if you haven’t yet. Do it wisely, don’t borrow against it for other investments and then use your experience to get out there and make better investments for profit.
