cor

i've always thought about this-- when i get out of college, because i'm going to a state school(and my parents paid for it), i'm going to have a lot of $$ left over b/c all the accounts are in my name and it'll be my money after college, i'm guessing like $24,000-40,000(not sure the exacty amount maybe more), i could put a down payment on a house, but most likely, i'll want to work for 2-3 years, and then start graduate school, and i don't think buying a house then would be a good idea... would it??-- economists always say buying a house is NOT an asset, it's a liability... and shouldn't be your biggest investment-- and so either i was going to just keep it invested, and let my dad ( a lawyer and a good investor) to keep it in good investments or maybe i was thinking that i'd put a down payment on a house in a place that in the future i want to live, and then just rent it out while i live where wherever i go to school--

i dont want to just spend it on something that won't make money--
what would you do with the money??

dfreder371

I'd buy a home. Bought my second in 1997, $113,000. Today worth $175,000. Show me a bank account or a stock investment that GUARANTEES $10,333 per year (been here 6 years, two months)

GreenMonster

Yeah, that would make a great downpayment. I put 20% down on my house so I could avoid PMI payments. I've got a 20 year mortgage (refin. from a 30 year), and I'm trying to pay it off as fast as I can.

It took me awhile to buy my own home, but now I'm earning equity instead of paying someone else mortgage (rent).

Dom418

There is no GUARANTEE that his home will go up any amount.... just like there is no GUARANTEE your's will.




One thought might me to purchase a lot somewhere... they land could appreciate. In a couple of years you could build a house on it, or if you're not ready, sell the lot hopefully at a profit.

GreenMonster

True, But I will GUARANTEE that you'll build up equity in any property you buy (plus some tax write offs). I'll also GUARANTEE that paying someone elses mortgage while renting is going to get you absolutely nothing

Housing values are a little inflated right now IMHO (in my honest opinion), because of the rates being so low. I think they'll readjust soon, so you might want to wait to invest in real estate. My brother is waiting to buy, and is renting a room of me for this reason.

I bought my house in Oct. 2001 for 180K. Refinanced in Jan 2003, when It was appraised at over 210K. House very similar to mine down the road from me just sold for 250K. Do I think I just made $70K. Nope. But I GUARANTEE it's worth more then I paid for it

If you haven't realized by now, I'm having a little fun with ya', especially with the GUARANTEE stuff

I agree about buying land. Lot prices for a decent plot might be more then he has to spend.

My step dad bought 5 acres out in the country for $5K when he was in his late 20's/early 30's. He built a house on it a couple of years ago. The area has been developed, so the lot alone would probably have been worth 200K plus. Not a bad return on a 5K investment, but he's living on the land, so he hasn't made any $$ off of it (only on paper).

Dom418

I also think real estate prices are overly inflated now due to such low interest rates. I would think the growth will slow some, but I can't really see housing prices decline (in most areas) at all... growth will probably just level off.

Scrib

What's scary is the thought that once rates do begin to rise, housing prices will begin to decrease. And with that...

ALL the people that took out the home equity loan against their inflated house appraisal are gonna be FOCKED.

Oh well...

GreenMonster

AND I'm wondering what this will do to the ecomomy.

When the rates dropped, alot of people tapped into the equity. Couple of houses in the neighborhood are getting garages, on with a nice dormer on the second floor for example. Guy at work paid off his car and is redoing alot of stuff at his house (big deck with hottub etc).

All these people are spending money. When rates go up, alot of that equity money that's being spent now is gonna dry up. Contractors aren't gonna have as many jobs, and won't be spending as freely...

Drop a stone into a pond and watch the ripples....

Dom418

Just remember.. as rates rise, many others areas of the econony generally pick up as well... Jobs, personal income, stock market, interest you can earn on investments... so people may be able to earn extra money from areas to help compensate for additional debt they may have taken on.. hopefully.

GreenMonster

That's true. I've seen indications that the job market is starting to improve.

The headhunter that placed me in my current position hasn't called me with anything in the past 2 years. I've heard from him twice in the past 2 months. Althought the pay rate wasn't that great for these positions, it is a sign that things are picking up as far as employment opportunities are concerned.

ViperrepiV

I'm new to this stuff, so I may be wrong. But so what if interest rates rise? Mortgage payments are gonna be the same, assuming your motgate is fixed rate. if you have an ARM, then things might be different.

also, cor, did the state pay your tuition (just curious)?

phattyCL

you might want to consider a condo to start out with instead. Unless you really want a home...just asking because I feel like, for me, having a house would be way more responsibility than I would be ready for. (I graduated last year and I'd rather be somewhere in the city living in a smaller place that I own, where I dont have too much to worry about, and no rent to pay. Its still a major responsibility and it may cost the same as a home depending on where you want to be but its worth a try. good luck with the bling.

dets

i could see how buying a nice loft apartment, say in DUMBO in brooklyn right now would be a nice idea.

if anyone knows the area its really starting to get great rates now. the market is picking up down there quickly.

as we like to say in nyc, its getting "gentrified".

cor

nope.