When should I buy an investment property?

Does the property cash-flow? That is the most important question. If the property brings in more than the mortgage, taxes, and insurance that is a huge plus. Then the question is what will the maintenance cost be over the next few years? A good inspector can help you note concerns. If those questions check out and you decide to purchase the property the three most important rules at that point is #1. renter selection #2. renter selection #3. renter selection! Spell everything out on the front end so there is no question as to the expectation from you and from your tenant.

When the numbers make sense. Focus on cash flow, long-term appreciation, financing terms, and your ability to hold the property through market cycles, not just timing the market.

The right time is when the numbers work without relying on best case assumptions. Run the math assuming the property sits vacant one month per year, has a surprise repair, and rents for slightly less than you hope. If it still cash flows or at least breaks even under those conditions, you are in a reasonable position to move forward. The benchmarks most experienced investors use before pulling the trigger are having 20 to 25 percent for a down payment, three to six months of reserves on top of that for repairs and vacancy, and a stable income that can absorb a bad month without putting your primary home at risk. The fear of getting stuck is valid but it usually comes from buying the wrong property, not from buying at the wrong time. A well priced property in a strong rental market with realistic numbers rarely becomes a trap. The ones that hurt people are the ones bought on optimism with no cushion. Do the conservative math first and let that be your confidence check, not a feeling.

I would wait until your primary residence has at least 50% equity. That being said you may have a very robust nest egg, or high income, where that might not be an issue. I would consult a CPA for assistance with budgeting. You can also "pre-qualify" (no credit pull) for a loan and see what they say about your lovability and how you may improve it ex: paying down debts, boosting credit score etc.