How Much Should You Put Down on Your First Rental?

You’ve saved up some money and are ready to buy your first rental property. Now comes the question: How much do you put down? Do you buy multiple cheaper properties or splurge and put the entire down payment into one bigger, arguably more stable rental? Should you start to scale from the jump or test the real estate investing waters before committing more money? After buying dozens of rental units, Dave and Henry have a clear opinion.

We’re back with your questions from the BiggerPockets Forums! A real estate rookie is wondering whether they should spend $100K on one down payment or split it up into multiple, cheaper rental properties. Another is planning on putting very little money down on his first house hack, but do the numbers add up in this not-so-stable housing market? If you’re ready for your first deal, both of these answers could give you peace of mind.

You’re about to sell a house flip for some serious profit—can you move that money (tax-free) into rental properties via a 1031 exchange? And if so, is the 1031 exchange worth the headache that comes with the timeline? Finally, a landlord is fed up with their rental and wants to sell. She has two choices: sell for cash and break even, or fix it up and potentially realize a five-figure profit. Would Henry, the renovation expert, make that bet?

Ask Your Question on the BiggerPockets Forums!

In This Episode We Cover

How much you should put down on each rental property you buy

What a solid first house hack actually looks like (mortgage, rent, etc.)

Why we don’t factor in rent growth (most of the time) when analyzing rental properties

Can you use a 1031 exchange to turn a