So here’s the situation the wife and I will have accumulated about 100k by the end of the year and we are debating whether we should use that money to 1) invest into a a rental property, 2) buy a house for ourselves or 3) save our money and continue renting. Right now we are renting a small apartment. We have a decent income for being in our mid twenties, and have definitely been living below our means for some time now. Any advice?
| +34 | Non-Competes Banned | 43 | 26s | |
| +32 | ADHD ! | 17 | 56m | |
| +30 | Being Christian in investment banking | 14 | 4d | |
| How do I become Sigma | 15 | 2d | ||
| +20 | Moelis has the cutest Analysts? | 4 | 3d | |
| +18 | Best NYC neighborhood for single 30M | 12 | 5d | |
| +16 | Underage intern, drinking? | 7 | 4d | |
| +15 | Can someone justify why is million written mm or MM? | 13 | 2h | |
| +13 | Secretive vs Universal Prestige? | 7 | 3d | |
| +10 | What are divorce rates in IB? | 13 | 5d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Ah, the classic conundrum of investing versus settling down with a family nest! Based on the most helpful WSO content, here's a breakdown that might help you swing from the vines of indecision to the solid ground of a decision:
Investing in a Rental Property:
Buying a House for Yourselves:
Saving Money and Continuing to Rent:
Remember the WSO rule of thumb: never buy a house that’s more than 2x your annual household gross income. This helps ensure you don't overextend financially. Also, consider the hidden costs of homeownership, such as maintenance and property taxes, which can add up.
Given your situation of having a decent income and living below your means, you're in a good position to consider these options. It's also worth noting that first-time homebuyers can withdraw $10k from an IRA without penalty, which could be a factor in your decision if you're leaning towards buying a home.
Ultimately, the choice depends on your personal goals, risk tolerance, and financial plans for the future. It might be worth discussing with a financial advisor to weigh the specifics of your situation. Swing wisely!
Sources: Plan on Buying a House in 3 Years - What to Invest in Until Then, The Last "what should I do with my money?" Thread (hopefully), The Last "what should I do with my money?" Thread (hopefully), If you were given 1 million dollars..., To Those Who's Had A Successful Career In CRE, What Advice Do You Have For Younger Generations?
Awesome saving up! Rental property margins are pretty thin but entirely dependent on the market. You could look at duplexes and living in one side (ideally a space that is an upgrade from your current apt) and renting the other side out ("house hacking"), downside is your neighbor is your tenant so would have to set clear boundaries, maybe operate through an online rental manager to minimize interactions.
One path could be buying a place in a fun part of town or close to work (ideally both) with the intention of staying at least 5 years. Or just continue saving until you've got enough for your ideal area. If kids could be in your future, school /neighborhood planning, etc. may come into play, but schools don't really matter until they're 5 anyways.
Background: married with two kids; lived in 1/1 apt 23-27 (fun area, close to work); bought a 3/3 townhome 27-30 (fun area, a little less close to work), first kid born during that period; moved to the burbs 5/3 home (for school district, we lucked out and both found better opportunities close to our suburb over the last 2 years) 30-32 (current), second kid born during that period. I wish we had kept our townhome as a rental but my wife and I both work in a very cyclical industries so wanted healthy savings and wanted to do some renovations so needed to sell. Hope this helps, good luck!
I’d rather invest in Hinge
Hic non accusamus ipsa reiciendis numquam dicta. Voluptatem necessitatibus consectetur qui reiciendis. Et nobis ex eos porro praesentium quo. Est vel maiores eaque omnis eum repudiandae laboriosam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...