I assumed they would want to have a kid or two in the next several years. In that case 2/1 would not fit. They would rent for another year or two and then look for 3/2.
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My wife and I are both in our 30’s. We have a 2/2. We have a kid. While it may get tight in the future, right now, it works fine. While we may not take up a lot of space, nor are we terribly atypical. That’s at the personal level.
At the investment level, once you have at least 2 bedrooms, it becomes a lot easier to rent out or sell the place. Based on the numbers above, it appears you could come close to or achieve an even cash flow with the right cocktail of purchase price, rent, and lending cost.
