You have $400k in cash, buy House with it or rent & invest

[Tien]

Depends on what you want to do.

If you want to throw money into a money pit, buy a house. It isn't only rent saved and property taxes. It's insurance, repairs, furniture for a house, lawn mower, appliances, etc etc etc.

Don't forget that as your house appreciates, the dollar inflates as well. So 5% appreciation isn't really 5% appreciation.

If you want that money to have actual return on investment, rent and invest.



I personally would only buy a house when I have a substancial amount of cash flow from passive investments to support being able to have a house.

[Henry17]

Well if he rents he'll need furniture and some insurance as well. The only big difference is the appliances but that is not significant.

[Tien]

Repairs is probably the biggest significance by the way because it is the biggest expense a homeowner has besides the mortgage payment.

[Henry17]

It depends on what he buys. Older properties would need repairs but something new should be pretty maintains free.

He also needs to consider what he could buy for $400k vs what he ends up renting. The property has to be the same value. Comparing a cheap rental to a nice owned property ignores quality of life issues.

[PokerPaul]

thats a very good point i didnt consider completely.

Because one could probably for equivalent monthly payments rent a $500k property, or own the $400k.

Maybe not a huge difference, but yes, you probbably can enjoy a little better lifestyle going the rent route....

[Jimbo]

[ QUOTE ]
thats a very good point i didnt consider completely.

Because one could probably for equivalent monthly payments rent a $500k property, or own the $400k.

Maybe not a huge difference, but yes, you probbably can enjoy a little better lifestyle going the rent route....

[/ QUOTE ]

Not where I live, the opposite would be true.

Jimbo

[Brad1970]

Look at it this way...if you are old enough & mature enough for homeownership...go for it. You'll never be evicted & the rent will never go up.