Should You Buy an Investment Property Before Your First Home? Finding Investing Success Early in 2023 

Are you getting ready to buy your first home? It may be worth it to hold off and buy an investment property first. 

While it may sound backwards at first, sometimes the best available option for people looking to enter the world of real estate is to put their dreams of home ownership on the back burner and buy an investment property instead. 

So, if you are wondering why you may want to consider using an investment property as a steppingstone to home ownership, you are in the right place. Let’s take a look at some of the key reasons you should consider trying to buy an investment property first.

However, before you buy an investment property is is important to sit down and talk to a mortgage broker about your financing options. After all a broker's guidance can be the difference between trying to buy an investment property at 6% interest and 4.5% interest depending on personal and market factors. So, if you are planning to buy an investment property, click the link below to book a free strategy call today.

Why Would You Buy an Investment Property First? 

Deciding to buy an investment property before you buy a home of your own may not make sense at first glance, however there are plenty of reasons it can be a wise decision. Here are five key factors to consider before making a purchase. 

Buying a House Might Make It Harder to Invest 

If you are planning to become a real estate investor and buy a rental property or another form of real estate investment, buying a home may make it harder for you to do so. Unlike your primary residence, deciding to buy an investment property has the advantage of generating income that can be used to pay down the mortgage loan and build equity in the property. In some cases, certain lenders may also permit you to make extra payments in order to pay down your mortgage even faster on top of your existing rental income. (However, you should always confirm this with your lender first.) 

The debt that you take on buying your own home on the other hand, typically will take longer to pay down without the benefit of additional income being generated on the side. This debt could potentially prevent you from purchasing rental properties if your lender believes it increases your likelihood of defaulting on either mortgage

Maintain a Flexible Lifestyle 

If you are young and single, or live a free-flowing lifestyle, you may not be ready to buy a home just yet. While buying a house can be an excellent personal investment and provide a strong level of security and stability if you are not planning to stay in one place for very long it could quickly become a hindrance to your lifestyle. 

Whereas when you buy an investment property, you are not tied down to the property location and can continue to move around and enjoy that personal freedom as long as the property is well maintained and properly cared for. 

You Cannot Afford Where You Want to Live Yet 

While some people will buy a home in a different neighborhood than the one, they want to live in and use that as a starting point in order to later purchase a house in their preferred area, this strategy is greatly dependent on your home’s appreciation being enough to manage your timeline. Alternatively, an investment property creates a secondary stream of income that can help you save a down payment on your own home even faster. 

Building Equity to Buy Your Own Home 

Speaking of earning money in order to buy the home you have been wanting, another key benefit to buying an investment property first is the ability to utilize the equity you have already built in that property in order to buy a house of your own. 

This can be done by refinancing your investment property once you have built up a reasonable amount of equity and utilizing those funds in order to make a larger down payment. This combined with your personal savings and additional income from the cash flowing property can potentially provide you with a much larger down payment than you otherwise would have been able to provide – thus allowing you to find a better home to live in. 

Start Earning Monthly Cash Flow to Support Your Lifestyle 

Sometimes, even if you are not ready to buy a home of your own, buying real estate can still be the right answer for you. Many investment properties have the advantage of generating cash flow – the additional rent left over after all of the property expenses are paid. This money is the immediate profits that real estate investors use to fund their lives or continue investing. 

So, if you are able to, buying real estate gives you the option to start earning that cash flow to help increase your personal income and live the life you want to live – even if that life does not include home ownership yet. 

Discover How To Buy Unlimited Rental Properties With This Step By Step Guide

House Hacking - Using Your First Home as an Investment Property 

Alternatively, even if you do not want to wait in order to buy your first home, you are still able to use that purchase in order to start investing in real estate through house hacking. Essentially, house hacking is the process of using part or all of your primary residence as rental property in order to create additional income. 

This can be done by renting out individual rooms, or additional units on your property while still living on the property yourself. This can help you cover part or all of your property expenses and free up some of your income to use however you wish. 

Financing Your First Investment Property 

If you are getting ready to buy an investment property, you need to ensure that you are getting the best mortgage service available. That is why at LendCity, we pride ourselves on offering an easy, hassle-free experience for our clients in order to give you the best experience possible while also securing you the lowest available rates for all of your investments. 

So, if you are ready to get started, or if you have any questions give us a call at 519-960-0370 or visit us online at In the meantime, you can download our free investors toolkit here to learn more about the world of real estate investing.

How To Successfully Buy Your First Property, With Scott Dillingham