Financial Planning

[Rx4Life]

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Ok people. Let's get down to BRASS TAX.

what strategies do you guys have for investing / wealth accumulation?
Are there any forums that talk about this in detail? Please let the rest of us know your ingenious plot to take the most advantage of this capitalist society.

I'm thinking of buying a condo when i get out of school, and prolly selling after 5 years for more (hopefully) and repeat this cycle until i get some serious cash stacked up (in a savings or money market accnt?) from these transactions. What do you think? Comments and suggestions are appreciated!!!

 

[off2skl]

WE currently have a condo and actually if we stay in the area we'll turn it into a rental property rather than selling it (I know there are headaches associated with that too). But, I live pretty close to a university and could probably keep it rented fairly easily.

The other thing my husband and I are doing is trying to take advantage of the slump in the economy by investing. I feel that the market will eventually go up again so we're buying in low (at lesat what we can afford). We max out hubby's 401K (to th epoint that the company will match).

After you graduate, if you work at a nonprofit hospital you may be able to qualify for a 403b. I think the current limit is 11K (pretax) that you can put in this account, but those numbers are changing.

 

[28657]

I'm thinking of buying a condo when i get out of school, and prolly selling after 5 years for more (hopefully) and repeat this cycle until i get some serious cash stacked up (in a savings or money market accnt?) from these transactions. What do you think? Comments and suggestions are appreciated!!!

I have heard from various financial advice places that buying new condos isn't an investment. New condos are like cars, they will eventually depreciate. That being said - my sister purchased an older condo in an ok area and in just four years it's appreciated about $6k. But IMHO, I think it's wiser to purchase and rent out houses if that's how you plan to make some cash, they appreciate much quicker.

But it's a lot of work! The person I rent my house from has 3 other rental homes and only mine is rented out at the moment. That means he's paying about $1500 every month for nothing. Plus he comes and does our landscaping every month, so it's a lot of upkeep. He told me the reason he rents out homes is because he works in the technology field and has a bad feeling about ever making it to retirement age with his current job.

 

[dgroulx]

I lived in a condo/townhouse for 15 years and it never appreciated in value. It was cheaper than renting, so overall I made out okay. Last year, we bought a brand house in a brand new "themed" development. It has appreciated by $50,000 since we signed the contract to build in March of last year.

If I had extra cash, I would invest in real estate. I'd buy land and houses, but steer clear of condos and mobile homes.

 

[Rx4Life]

Thanks for the info guys...very helpful!
😀

 

[spacecowgirl]

I definitely want to get into real estate too - I see a lot of potential there!

And the best financial advice? Contribute your max every year to your 401(k) and open and max an IRA. The sooner you start the better - the power of compound interest is amazing!

 

[sargepharm]

I have been hearing alot about a real estate bubble these days. Home prices have appreciated in some places such as Miami by fifty percent in the last five years. That being said the long term average for real estate appreciation is around 3% per year. In BusinessWeek an article concerning this event stated that housing was overpriced by 10% nationwide and even higher in some markets. As interest rates rise this should put a downward pressure on real estate prices. Stocks have on average returned around 10% per year over the history of the stock market. So, in my opinion one should focus their long term savings into the stock market rather than the real estate. In any case, it is highly unlikely that home prices will continue to rise at their current level.

 

[Tuck]

I would highly recommend NOT buying a condo. Even assuming that when you sell that you get a better price than what you purchased it for, you will still be paying monthly HOA fees for the upkeep of common grounds. For the most part this can range from 100-400 a month depending on location, etc. I've sold real estate for the last 3 years and have yet to see anyone make any significant amount of money on a condo, even as a rental. On the other hand, IF you can put enough down AND keep a home rented so that it pays more than your mortgage on the house, then it can be a viable investment. On the flip side, you still are responsible for maintenence, and renters are notoriously hard on homes. My recommendation is to maz your contribution to your 401k, max your investment in a ROTH IRA, and do 1 of 2 things. First you can buy as much house as you can afford so you can write off the interst on your taxes, or you can buy a cheap house and invest more in the stock market. Over the long run, you can make very good returns in the market, but you also save more money via interest write-offs if you have a larger mortgage. There are a number of financial calculators out there that can give you a good idea what you need to save and how to go about it to reach your goals. Do a google search for a retirement calculator and it should bring up any number of choices. The best ones all factor inflation into your numbers so that the money you will have is reflected in what todays buying power will give you. Hope that helps a bit anyway.

 

[goheel]

I'm thinking about buying a condo/townhome to live in while i'm in pharmacy school, is that a good idea? My sister might go to the same school later, so she might be able to live there when I'm done.