When Is It Okay To Buy A Rental Property?

When Is It Okay To Buy A Rental Property?

Listen to how ordinary people built extraordinary wealth—and how you can too. You’ll learn how millionaires live on less than they make, avoid debt, invest, are disciplined and responsible! Featuring hosts from the Ramsey Network: Dave Ramsey, Ken Coleman, Christy Wright, Rachel Cruze, and John Delony.

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[lifeisgreat]

I currently sit on 3 multi family homes I accumulated within 5 years. I paid 395K for the first one. If I’d waited to have 395k saved, I’d still wouldn’t have enough to buy it, because now a similar house sells for 650k

[tahirisaid]

I predict a housing crash due to people buying homes over asking price, lacking equity if prices decline further. Foreclosure becomes likely if they can't afford the house, and selling won't yield profits. With anticipated layoffs and rising living costs, many individuals may face this situation.

[shanisonia]

We Are in Unchartered Financial Waters! every day we encounter challenges that have become the new standard. Although we previously perceived it as a crisis, we now acknowledge it as the new normal and must adapt accordingly. Given the current economic difficulties that the country is experiencing in 2024, how can we enhance our earnings during this period of adjustment? I cannot let my $680, 000 savings vanish after putting in so much effort to accumulate them.

[xl]

I understand and support 100% Dave's principles against debt, especially in a culture where people borrow their way of life. However, when it comes to real estate investment, if people waited to pay cash, less than 1% of people would end up owning anything.

[filmislife]

I bought my first rental last year for 199k my mortgage is currently 146k @ 2.85% if I put the house on the market today I would at least get 300k. On the other hand if I would have waited till I had cash it would have taken me 10 years to save up enough to buy that property and I know that it's going to cost a lot more than 199k in 10 years

[Nilsosmar]

I'm not rich by any means, but I was able to pay off the home I live in early by following Dave's advice. Every $1000 that 's paid early in the loan can save several thousand dollars in interest. The trick is to make the prepayments early in the loan. Prepay as much as can in the first and second year. Your extra dollars will have much more impact that way.

So I'm grateful to Dave for his advice in that sense. However, there's no way I would ever be able to cash out a rental house, at least not in the community I live in (Seattle). Homes, including rental homes, start at around $700, 000.00 I'm currently saving about $40, 000 a year. So it would take 17 years to save enough to buy a home for cash! And by then it would have at least tripled in price.

[linuxsurfer]

I would add, keep back most of the rental money to account for repairs/maintenance/insurance/taxes, at least at first. Maybe build an account up to $15k to keep up with maintenance.

[lisabaltzer]

Stay away from LEVERAGE! My late husband and I sold a commercial property. Financial advisors were telling us to use “leverage” to buy rental properties for twice the amount that we sold the original property for. We were afraid to do that and didn’t want to go into debt, so we paid cash for the rental houses and commercial properties we bought. Thank God we paid cash, because when covid hit, the restaurant we were landlords to didn’t pay us one penny in rent for more than two years and we probably would have lost it if we owed money on it. I also learned that I NEVER want to own property in Washington state or any other blue state again. After the covid debacle was over and Washington allowed restaurants to open again, we sold it and invested in Idaho.

[ryanhenson]

Took 5 yrs to save for our personal home. Paid cash. 7 yrs later and making a family on the way and I’m about to pay cash for a rental. In a very expensive market

[william]

i wish they asked the callers what their household income is more often. i know there are situations like these where they don't need to ask that at all but from the viewers side its just a super interesting and entertaining thing to know

[richcreager]

Been Debt Free 12 years doing the Ramsey Program . In 12 years I've bought 56 properties both Residential and Commercial with No Debt. It can be done.

[WolfmanMadden]

I almost fell for a similar scam selling something where someone wanted to pay extra. Post office guy looked at the package and said, “nah, you’re not sending this. This is a scam.”

[retirementbudgettravel]

Please talk about reverse mortgages. I’m a real estate broker & it seems that everyone who does a reverse mortgage always ends up loosing their home to foreclose. Always older people…bad financial

[jasonjosephlee]

When you have some reserves and can comfortably put down a hefty down payment. Then you can continue to leverage debt as the property appreciates and you can pull some equity.

[Mithos]

Before I hear him; when you have the cash to buy it

[davidboyd]

I have seen a lot of people go broke/bankrupt with rental property. Be more careful than you think you should.

[zivliv]

You don't need to pay of your mortgage to buy rental property. I own 9 properties including my own home, I owe nothing on 8 properties and the only mortgage I owe is my own home. It may not be the case today because of rising mortgage rates, but two years ago, I refinanced my own house, and bought rental property cash. I also cashed out my IRA, paid off the taxes on it, and bought another property cash. As long as you buy a good valuable income property, with decent schools, and in area with high employment, it's a great investment!

[rachelharrison]

It’s not simply a matter of $. You have to want to be a landlord.

[Nilsosmar]

The problem is, the difference in prices depending on where you live. Here in Seattle, the cheapest houses (for fixers) are around $750, 000. Nice houses start around $1, 000, 000. I've followed Dave's excellent advice on paying off my house early, and saved up enough for a down payment on a rental property. But I don't know anyone, anywhere, who has $1, 000, 000 lying around to buy a rental house. (I'm sure there are people, but not around these parts.)

[abhitejpaul]

He needs to update.. he is giving same advice from decades.. why would I pay off my 2% mortgage when I can put that money in just a savings account and get 5% on it. Or better, I bought 2 rental properties in 2020 by not paying off mortgage and putting 30% down on them. Both properties are up 100k each.. By Dave's advice I would still be paying off my 2% mortgage