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Purchase a more expensive house or invest in real estate property?

I have extra funds that I would like to utilize in the manner of - buying a bigger house or purchasing real estate property that I would rent out to tenants. Each option has it's benefits and drawbacks. Which would you choose and why? Thanks in advance for all those who respond!

Public Comments

1. I think having mutiple houses and renting them out would be a more intelligent idea as the tennants would pay off the mortgage for you over the first 30 years and then you would have an income from them after the mortgage is all paid off and you are older and retired. Also, house values are so low that all they can do is go up eventually. A larger house for you now may be nice but financially and in the long run it is not going to help you the way investing in multiple houses would. Also, keep in mind that it is TOTALLY a buyer's market. If you were to sell your house to buy a larger one, you would lose much of the value of it that you could have gotten by waiting. Now is the time to buy.
2. That depends on whether you want to be a landlord or not. Rental properties are great if you hold them, and can afford the maintenance on them, AND can cashflow. Be prepared to replace the carpet with just about every tenant though, and to get calls about every little thing that goes wrong with the place. Here in Charlotte there are some great properties that bring in massive amounts of rent. It's all in where you invest.
3. First of all buying a bigger house is emotionally beneficial and rewarding but purchasing real estate and renting it out to tenants would be financially beneficial and also rewarding. Just ask yourself what kind of rewards and benefits are you really looking for?