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No one can give you a decent answer with so little information.
I'm not looking for an answer, just a discussion of various pros and cons...
I would give it to this CRE guy I met on the internet. Seems like a swell guy. Nice thing to do.
Edit: Thanks for the monkey shit, loser
lmfao
Honestly, this is so dependent on your personal circumstances and preferences that it's impossible to answer for you.
Do you value owning your dwelling? Don't want to rent anymore? Then buy a house.
Don't want to own your dwelling? Don't mind renting? Then invest instead.
By and large, home ownership (i.e. the accumulation of real assets for personal use) =/= real estate investment. Yes, it's possible that you could park capital in your own home and see it appreciate significantly over a period of time. However, it's certainly not guaranteed, and that shouldn't factor that much into your decision to buy a home. Treating a personal residence as an investment vehicle is bad news (see: U.S. residential real estate c. 2003-2008).
tl;dr -- If you're expecting return on investment on that $50K and hope to realize it within a narrower window, don't use it for a down payment on a house. Invest it in something else. However, if you simply want to own a dwelling and aren't counting on immediate return, buy a house.
Not sure what part of the world you're in, but why not buy like a duplex?
Buy a multi-fam (3-5 units) using an FHA loan, live in one of the units (or just declare it as your primary residence on the loan app, have the tenants cover your mortgage/taxes/expenses and repeat.
^^ This.
South Boston is a perfect example of this. Everyone is in a 3-story family house. Buyers purchase the property, gut-rehab each floor, live on the top floor, and rent the two floors below them to pay their mortgage/taxes/etc. It's very common and home owners are making a killing right now because rents keep rising.
Don’t think such a house in Boston would be within FHA limits to make only a $50k down payment work
I would only buy for-sale housing right now if it was a steal. Or if I wanted to have kids and raise a family immediately.
Buying a house is certainly a financial decision, but really, it's a lifestyle one too. I'm 40. When I was 24 I had two dogs and a wakeboard boat. Finding someone to rent to me was impossible. So I bought a house. Now I'm single, live on the coast and rent a cheap 1br apartment. I'm content.
It's about money, but more importantly lifestyle.
I'm not anti investment even though we're at the top of the market. I am probably going to invest some commissions with a client this year on MF deals I brought him. The financing is killer, there is upside in many ways. Sure we are the top of the market, but it's hard for me to place $50k one or two times a year for the long haul by myself with 3.8% long term fixed rate debt. So, I'm just going to be a LP. This client will sort of save me from myself, lol. He never sells. So, 20 years from now this money will still be in the same buildings. No cashing out...I'm stuck just receiving rent. He doesn't even exchange. So, it's a long term commitment.
If you really work in RE development / finance, you should be able to run the numbers on this yourself.
Invest it. Always be creating income streams.
Pay down all high interest debts. Cash cushion for at least 6 months of LTM average monthly expense; prefer 24 months if possible. After that, I think you should think about generating additional incomes. I would only buy a house when my passive income can support the mortgage; if not, just rent.
By cash you mean highly liquid assets? Or just straight cash?
Why rent instead of buying?
Cash as in liquid assets; won't hurt if 50% of that is hard cash either. You can't trust the banks.
For housing, unless there is potential for land/house value in capital appreciation, you will end up paying more in term of maintainence, insurance and property tax, in comparison to straight up rent. Plus house is extremely illiquid, if you are still young and might be sure of where you will be in the next 5 years.
Straight cash homie
110% agree with the guys who mentioned buying a 2-4 unit asset and living in one. You'll learn a ton in the process, can rehab the units as tenants move out, and not have to pay rent/mortgage if you play your cards right. Then when you move out, you'll have steady income and can go a variety of different directions. On a SFH, you'll be chained to your mortgage payment from day 1.
Agreed with buying a 2-4 unit and live in one. Currently looking to possibly do the same. Still living at home and planning to move out. Was originally going to rent but rethinking now and doing some local market research.
What types of prices are you guys looking at on the 2-4 unit buildings? Here in the DC Metro area stuff is very expensive.
tough to buy in a metro area... I'm in manhattan and I am buying stuff in Jersey for value and proximity to NYC... You can buy a 3-4 family in a pretty rough neighborhood for $250k-$400k and get section 8 checks for each unit and make positive income each month.
My advice is to buy in areas where you are receiving gov't checks every month and will not need to put in $$ for high quality reno work... If you can put in $10k-$15k/unit and rent for $1300-$1700/month with guaranteed checks, you win.
Re-fi the building, keep it income producing and keep buying.
Looking to buy in NJ as well as that's where I live (work in NYC however don't have any interest to ever investing there)
What are your thoughts on investing in properties near beach at Jersey shore?
Used to work for a slum lord in Bronx New York for section 8 public housing projects. You will be dealing with druggies everyday. The cash flow is stable but it is definitely not passive income. I spent most of my time trying to collect rent, fixing the apartments, and trying to evict druggie tenants.
Bounce house. It's a house, and it makes you $$
+1 for the laugh
For all the RE guys - is residential heading for a correction? I'm looking at SFH and 2/3/4 unit properties and the prices seem redonkulous lately. What gives?
Residential where? Big differences across US
Seems like most residential housing markets are at/above their 2007 peaks. I'm looking across the US with a focus on suburbs surrounding major cities. While I'm looking at the area around NYC in particular, what I'm wondering is if I buy a rental property now.....or wait a bit for a 10-20% haircut in the next year or two?
I'm especially concerned that the Trump administration is going to screw the pooch on the economy, or how the impending stock market correction is going to affect housing prices.
It's a simple thought experiment: look at the S&P500 chart, then back it out to full history. You see 2 peak/crash cycles, and then today's prices out do all prior peaks.....there almost has to be a correction.
Question is: when?
For sure invest in deals and rent a house if the deals do 2.0x in 4 years. All of the money you make in the deals will be more than rent and certainly more than interest, maintenance, and other expenses of owning your own home. Until annual rent is yielding 20-25% of home value (which won't happen), you'll net more by investing in deals.
It all depends on the deal. If you can find a viable deal with a leveraged return above 15%, seems to me like investing over buying a house is a no brainer. We won't see these returns forever. Might need to look in secondary and tertiary markets though, and if you're not familiar with them, that's tough.
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