Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
home or invest
Old 09-11-2006, 07:41 AM   #1
Confused about dryer sheets
 
Join Date: Sep 2006
Posts: 3
home or invest

As I'm coming back from living abroad with a large sum of money I'm wondering if it's best to buy a home outright or to invest the money or both.

__________________

__________________
coolwave is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: home or invest
Old 09-11-2006, 07:51 AM   #2
Full time employment: Posting here.
 
Join Date: Dec 2004
Posts: 714
Re: home or invest

Depends where, depends how much money. But your timing is a bit awkward.

The U.S. has come through an unprecedented residential real estate boom, and some areas of the country are beginning to experience a bust ... see many other discussions in this forum on the same topic.

There are some areas where I think you'd be fine buying a home, still getting a decent rate on a fixed rate loan, and investing the rest. I would definitely NOT put it all in the home. Nashville, TN is growing nicely, and homes are appreciating here, and some other SE areas will prosper ... but FL looks iffy, for example.

Generally, you may be better off renting, and watching for foreclosure bargains in many areas ... keep your powder dry for now.
__________________

__________________
Craig is offline   Reply With Quote
Re: home or invest
Old 09-11-2006, 08:09 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: home or invest

I think Charles covered the money side of it pretty well. But there are lots of non-monetary considerations, especially if you are married and/or have kids. I personally think that the non-monetary stuff should trump some of the monetary stuff in this case, although it is wise to consider the implications of any chice you make.

Case in point: There is a house in our neighborhood that is for sale for the second time in about 18 months. It is wildly overpriced for the area, but I suspect that the owners are flippers who overpaid last year and then proceeded to dump a lot of money into the place. I see no interest in the property, and it looks like the owners haven't been around in a week or better as the stuff that came down in the yard from Ernesto's passing is still there and the grass is a little tall. It wouldn't shock me to see the house in foreclosure in a year or so. On a whim, I asked DW if she would consider moving if the house became available at fire sale prices. Much to my amazement, she said yes.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: home or invest
Old 09-12-2006, 07:43 AM   #4
Confused about dryer sheets
 
Join Date: Sep 2006
Posts: 3
Re: home or invest

Ok, I'll try to clarify.

I'm 33 years old, single but moving towards marriage. No kids. I'm Canadian.

Depending on where I locate to, I have enough cash to outright buy a home (smaller city), or make a downpayment of at least 50% on a home in a large city (where property is booming).

In either situation, should I just make the smallest downpayment possible and try to invest the remaining (RRSP mutual funds) or should I buy the home and then contribute larger amounts to my RRSP monthly as I won't have mortgage payments.

As you can probably tell, I'm not a financial whiz, but I'm starting to make an effort.
__________________
coolwave is offline   Reply With Quote
Re: home or invest
Old 09-12-2006, 08:01 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,627
Re: home or invest

With that added information coolwave, the answer is still,"It depends."
__________________
LOL! is offline   Reply With Quote
Re: home or invest
Old 09-12-2006, 08:32 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Ed_The_Gypsy's Avatar
 
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,293
Re: home or invest

You are* coming in a little late to the party.* Real estate in Alberta, Toronto and BC has really come up.

Beware if you are, for example, in the oil business and coming to Calgary.* Your job may disappear at the same time the local housing market collapses (because everybody else's job has disappeared).* It has happened before.

I personally don't like the idea of having a lot of money tied up in illiquid real estate, even a home.* If you want to own, consider buying the smallest place you are comfortable with to minimize your risk.* Invest the balance elsewhere.

If you don't need to work, or if you can work anywhere, you have more flexibility.* *

When we move to a new place, we rent for a year or so and study the local market.* We buy something in a desirable neighborhood that has potential and needs a little work.* This has worked very well for us.*

Take your time before sinking a lot of $ into a house.

My opinion.

Ed
__________________
my bumpersticker:
"I am not in a hurry.
I am retired.
And I don't care how big your truck is."
Ed_The_Gypsy is offline   Reply With Quote
Re: home or invest
Old 09-12-2006, 09:44 AM   #7
Confused about dryer sheets
 
Join Date: Sep 2006
Posts: 3
Re: home or invest

Thanks Ed. That's the kind of logic that I need to feel better in making a decision.
For some reason, I always think of renting as throwing money away.
I always hear that Alberta will boom for at least another 10 years.
__________________
coolwave is offline   Reply With Quote
Re: home or invest
Old 09-12-2006, 10:29 PM   #8
Confused about dryer sheets
 
Join Date: Sep 2006
Posts: 4
Re: home or invest

I've always gone by the rule of only paying the minimum on our house (after 20% equity has been achieved and PMI is dropped). Extra funds should be put in mutual funds with a good track record. You will earn 9-13% most likely, compared to the 6.5% that you would be saving by putting extra cash into your home equity.
__________________
Hack the Dollar into a Money Tree<br />http://www.financialhacks.info
ccaccc is offline   Reply With Quote
Re: home or invest
Old 09-12-2006, 10:58 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Ed_The_Gypsy's Avatar
 
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,293
Re: home or invest

Quote:
I always hear that Alberta will boom for at least another 10 years.
Well, it might. I hope so. I work here.

Come over and make up your own mind. If I am wrong, you should be prepared to move quickly. Even so, I wouldn't buy a $$$$ house. It is like a game of musical chairs.

Good luck,

ed
__________________

__________________
my bumpersticker:
"I am not in a hurry.
I am retired.
And I don't care how big your truck is."
Ed_The_Gypsy is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
RE effect on Home Insurance omni550 FIRE and Money 6 03-15-2007 10:08 AM
Scott Burns burns Home Depot REWahoo Other topics 17 03-06-2007 10:09 PM
Second Home treypar Life after FIRE 56 02-27-2007 05:52 PM
ER is 2 Years Away, Where Should I Invest $300K? Hydroman FIRE and Money 12 05-06-2006 06:10 PM
How many of you can RE now, but working because of children at home? yakers FIRE and Money 16 04-18-2006 12:44 PM

 

 
All times are GMT -6. The time now is 03:39 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.