Rental Property for First Time Homebuyers

[PenniesinParadise]

My wife and I live in Santa Barbara, CA and currently rent a small 1 bed. Being fairly mustachian, we've been able to save up a nice 'stache which we hoped to put toward a house, as we hate tossing away our rent money while continually missing out on the mortgage tax deductions. However, Santa Barbara housing prices are obscenely expensive. While our 'stache would buy us a house in cash in most places in this country, in Santa Barbara it wouldn't make a down payment on mobile home lot.

So... lately we've been tossing around the idea of buying an investment property elsewhere. If buying a house here just doesn't make sense, why not do it somewhere else? This way we could at least be receiving the tax benefits of owning a home -- even if we didn't actually live in it.

Is this crazy? Has anyone done this? Thoughts?

[arebelspy]

Absolutely.

As The Real Estate Guys say (they have a radio show and podcast): "Live where you want to live, invest where the numbers make sense."

I own some near where I live, because it made sense to do so.  Due to appreciation over the last two years, it no longer does, and I am purchasing elsewhere.

Eventually I'm planning on renting, while owning in other locations.

If it doesn't make sense to buy where you live, don't do it.  Stick with equities.  If you still want to own real estate though, your only option is to invest elsewhere.