THere are a number of ways that you can access money in both your IRA nad 401(k) penalty free before age 59.5
There's even a sticky on it.
72t/SEPPs are one method, as is setting up a ROTH conversion ladder.
IF you want to buy a rental income then you should weigh that against the tax advantages of fulling funding your 401(k)s. How much a benefit that may be to you depends on your tax bracket. In most cases the tax advantages of fully funding your 401(k) are worth it, but if you have no other way of saving up for a large down payment than some of that money shoudl be diverted to post-tax savings.
+1. Sticky is
http://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/.
Generic investment order rules of thumb:
In the lists below, thinking "first your 457 (if you have one), then your 401k and/or 403b" wherever "401k" appears is likely correct -
unless your 457 fund options are significantly worse than those in the 401k/403b.
Differences of a few tenths of a percent are not important when applicable for only a few years (in other words, these are guidelines not rules).
WHAT
0. Establish an emergency fund to your satisfaction
1. Contribute to 401k up to any company match
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield.
3. Max HSA
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level
5. Max 401k (if 401k fees are lower than available in an IRA, or if you need the 401k deduction to be eligible for a tIRA, swap #4 and #5)
6. Fund mega backdoor Roth if applicable
7. Pay off any debts with interest rates ~3% or more above the 10-year Treasury note yield.
8. Invest in a taxable account with any extra.
WHY
0. Give yourself at least enough buffer to avoid worries about bouncing checks
1. Company match rates are likely the highest percent return you can get on your money
2. When the guaranteed return is this high, take it.
3. HSA funds are totally tax free when used for medical expenses, making the HSA better than either traditional or Roth IRAs.
4. Rule of thumb: traditional if current marginal rate is 25% or higher; Roth if 10% or lower; flip a coin in between (or see
http://forum.mrmoneymustache.com/investor-alley/deciding-between-roth-and-traditional-ira-based-on-marginal-tax-rate/ if you want even more details on that topic). See also
https://www.bogleheads.org/forum/viewtopic.php?f=2&t=182081,
http://forum.mrmoneymustache.com/ask-a-mustachian/case-study-overwhelming-student-loan-debt-how-would-you-get-started/msg868845/#msg868845 and other posts in that thread about exceptions to the rule.
5. See #4 for choice of traditional or Roth for 401k
6. Applicability depends on the rules for the specific 401k
7. Again, take the risk-free return if high enough
8. Because earnings, even if taxed, are beneficial
The emergency fund is your "no risk" money. You might consider one of these online banks:
http://www.magnifymoney.com/blog/earning-interest/best-online-savings-accounts275921001 If your 401k options are poor (i.e., high fund fees) you can check
http://forum.mrmoneymustache.com/investor-alley/to-401k-or-not-to-401k-that-is-the-question-43459/for some thoughts on "how high is too high?"
Bogleheads has a similar list.
