Should I stretch my Budget to Buy an Investment Property?

It is not uncommon to be intrigued by an investment property that is just out of your price range. In this situation, you have one of two options. You can stick to your budget and continue to look for something else, or you can stretch to see if you can make ends meet. Which one is best for you?

Whether or not you stretch your budget to buy an investment property depends on many factors. To start, how far do you have to stretch? For example, you may have a budget of $100k but are interested in a home for $125k. This is much better than a budget of $100k and trying to stretch to $200k. The smaller the difference between your budget and the cost of the property the better chance there is that you can make it work.

How can I make stretching my budget as easy as possible? One way of doing this is by coming up with more money. While this is easier said than done, you may be surprised at all the places you can find additional money for a down payment.

Of course, you only want to stretch if you are 100 percent confident that the property is good for your portfolio. Why would you want to take a risk on something that might not work out?

It is your decision. Some investors stretch their budget time after time and it always pays off. Others get in too deep and end up having to dig their way out. What are you going to decide to do?