When buying might make sense

#1

Love the perspectives you post. Helps me think rationally about renting and living below my means.

A unique situation I’d be interested in your opinion of this scenario:

  • 65k in a low risk vanguard bond fund. Rest of my savings in vtsax and other standard low fee funds.
    It’s tempting with my job now remote to not renew my lease. Instead, buy a simple 300k home where I’m from and pay 1400 a month to the mortgage (cost of my city apartment spot).
    Then when winter passes rent the house and move back to the city.
    The argument not to do this and keep investing would likely be, why not go aggressive since I’m young and move out of the 65k to the target 2060 account.

I’m torn on the options and would love your thoughts

#2

Hey @Deli2020!

If you’re planning for this real estate purchase to be primarily an investment (i.e. you’re just going to live there temporarily) I think it would depend almost entirely on the details. Notably:

  • Will it be cash flow positive once you have a renter in there? (After all expenses… mortgage, insurance, tax, maintenance, vacancies, etc, are you still getting positive cash flow?)
  • Do you want to be a landlord and manage a property in this location?

If the answer to both of those is yes, then I might do it! Sounds like a good investment and something you want to do. If either answer is no, then no I wouldn’t. Don’t use a temporary change in lifestyle as a reason to get into a bad rental property or a property management business you don’t want.

#3

Love both of these simple and straight forward questions. Amongst all the noise, these are two really good questions to ask.

Thanks, Jeremy!