Thank you Jeremy for all the information and content you share! I am 24 years old and live with my parents. I have saved 90k the past few years running an online business out of my parent’s garage. My neighbor of 15 years is going to sell her house and I am thinking now could be the perfect time for me to buy. Our city is one of the fastest growing in the country and the house is close to my parent’s who help with my business. I know there is no straightforward answer but I would like to hear your thoughts on this? Thank you for sharing your knowledge and experience.
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Hey Tyler!
Congrats on the successful business and living below your means! That’s awesome.
Well first, to be clear, buying this house will cost you money. Living with your parents and saving/investing all that money will definitely make you more rich.
That said, you’re 24. You should move out of your parent’s house.
So… I can’t possibly tell you whether to buy this house. Do you want to be a homeowner (and deal with maintenance, landscaping, taxes, etc). Do you want to live there for at least 5 years (it’s generally not worth it to buy if you’re going to sell within 5 years). Do you want to live directly next to your parents (it sounds like?). Have you ever lived on your own before?
You’re young, unmarried from the sound of it. You’re growing a business. What about renting for a year or two to see how that goes?
Financially, rent or buy, the more you limit the cost of your primary residence the more wealthy you will be. So don’t sign up for $4,000/month in mortgage/interest/insurance/maintenance/taxes/fees if a $1,200/month rental will serve your needs just fine. The $2,800/month difference (for example) would make massively more money in an investment, like index funds or investment real estate!
So… just some thoughts, if you want to share more about your needs and thought process we may be able to give more feedback!
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Thanks a lot for the prompt reply! I was already leaning towards renting and this made me think it is definitely the right choice for me. I dont want to get all the capital I have built tied up in a house when it is not necessary for my current needs! I already max out a Roth IRA annually but I am wanting to use more of my savings in investments. Where do I go to learn about investment real estate? Thanks again!
I definitely wouldn’t cap your equity investments at the $6K/year. With your business you can likely put a lot more into an SEP IRA. Or, if you don’t want to lock up the money until retirement, there’s nothing wrong putting it into a regular brokerage account. I wouldn’t want to leave that money in cash for a long time not working for you.
Do you have any friends or family who own investment properties? I think walking though the process of buying/managing one with a real person in your area is really eye opening. Other than that, the Bigger Pockets Community is great. They have some good books on real estate investing too.
But as always: Don’t get too caught in the weeds. Spend less than you make, dump the rest into index funds. Do this over the course of many years and you will be very rich.
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Thanks a lot! I will look into SEP IRA and a brokerage account. I do not have any friends/family that own investment properties that I know of. I am new to all of this but am happy to understand the fundementals of saving and investing. Thank you for the replies and shared knowledge.
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Wow nice work with the business and savings!
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