Hypothetical Q: Rental Condo vs Stocks
I am beginning to start off my investment career and also to become a first time home buyer. I am interested in the 2 bedroom 'downsview' townhouse condo (http://www.hr-newhomes.com/westown) which is going to be built late next year. It is 868 sq. ft. on the main floor and only costs $204,900 and maintenance costs should be around the $200/month range. Mortgage will be at a fixed 4.25% and I currently qualify for $500,000 mortgage.
I was thinking on purchase 2 properties here: one as a principal and the other as a rental which I think I can get for $1200/month rented to a small family. I am thinking on putting 10% down payment on both.
In a hypothetical 5 year time, would my net worth and cash flow be better as opposed to dropping the $43,000 in stocks with the assumption I have $500 in rent to pay.
Or alternatively, I should drop the entire $43,000 down payment into the principal and then in a years time, take out the HELOC towards the same property assuming that it'll be similarly priced.
In which situation would I be better off?
Disclaimer: this is just at the brainstorming phase, i will definitely visit an advisory before i actually execute.