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I have 200K plus 100K(401K). I live in rented apartment. Should I spend 200K as down payment to buy townhouse or should I invest it on ETFs by keep staying in rented apartment? Which is one better? My goal is to increase the value/returns overall.
How much is your rent? If you are living under rent control and single then don’t buy.
2500 rent no rent control..married
I have $400K , renting a SFH for $3K and making a killing in stocks ..if you are concerned about returns, stocks are the best bets..
Use rent buy calculator
No. You shouldn’t have 0 cushion. Anyway, I don’t think a bank would even give you a mortgage with 0 cushion.
They would. I’ve done it
Conventional wisdom says buy if you plan to stay in the house for 10 years. I propose a slightly different one: buy if you plan to stay in the same metro area in the next 30 years. When Bay Area house value rise, the house preserves the value relative to its neighbors. So whenever you makes more money, you can keep upgrade to better houses. So when SV house value rose 28% last year, my 20% down payment just doubled. After all, if you pour all the money in stock market, what’s the point of making more money if you can’t enjoy it.
I invest heavily in 401k ~ 180k. My investment is +23% now . You can always withdraw from 401k with 25% fed tax + 10% penalty. But 401k much safer bet and better deterrent to keep your money 💰 invested
If you plan to stay in the Bay Area for the next 5 years - buy a home. Your rent will burn a hole and it will only keep getting bigger.
Do it all, one by one. That’s the best advice, recommend starting with stock
Don't but a townhouse or condo. Save for a sfh
My townhouse appreciated even more than my stocks in the 2.5 years I've owned it
That's awesome, but supports my point. When stocks correct your townhouse will likely also correct and much harder and faster. Plus hoa, hoa, and hoa. Just a general piece of advice of course based on decades of broad experience and data. Your experience may vary (and hopefully in your case!)
What area?
Bay area
Good luck