Nothing Inbetween (Pittsburgh, Dormont, Kennedy Township: chapels, cheap house, neighborhood)

[zip95]

And just to relate all of the side conversation back to Captain's original question and my original reply.....

If you know what you're doing and have a little luck, it's completely possible to beat a 401k with a good real estate investment, or something else.

Like I said:

Originally Posted by Zip95

You have to look at your own situation, determine your appetite for risk, and see what's available to you.

[lostinpgh]

Originally Posted by zip95

You deposit $100 into a 401k, your company matches your deposit, PLUS the 401k pays 5% continuously compounded.

Only if you choose to invest your 401k into something paying 5%. I can put mine into individual stocks or a NASDAQ index or into REITs.

[CaptainObvious]

This is getting weird.

Having said that. I'm sure real estate investments out there somewhere can get me 40% gains. Then yes, even with the instantaneous doubling of the investment, real estate would be a better deal. I'm just not smart enough to find that investment. I have a home life, a real job, and life to attend to. So, I'll take my automatic match and an average of 7% a year. That makes my $100 investment worth about $12,000 in 40 years. With the relative minimal risk I have to take on to do it, I'll take it. I'll leave the extraordinary risk and the 40% gains to someone smarter, with more of an inclination towards risk than I.

Cap

[Hopes]

Originally Posted by CaptainObvious

Having said that. I'm sure real estate investments out there somewhere can get me 40% gains. Then yes, even with the instantaneous doubling of the investment, real estate would be a better deal. I'm just not smart enough to find that investment. I have a home life, a real job, and life to attend to. So, I'll take my automatic match and an average of 7% a year. That makes my $100 investment worth about $12,000 in 40 years. With the relative minimal risk I have to take on to do it, I'll take it. I'll leave the extraordinary risk and the 40% gains to someone smarter, with more of an inclination towards risk than I.

For extra money you use to invest, that makes sense.

But consider the money you spend in rent. That's wasted money that's doesn't have anything to do with your 401k. Spend that money on a mortgage instead. The house will appreciate in value over time. The money you pay now in rent won't be wasted if you spend it on a mortgage.

You're afraid. Have you even looked into this? Have you gone to a mortgage broker to find out how much you qualify for and at what interst rate? Sometimes you only need a 10k down payment for a starter home. You don't necessarily have to deplete your entire savings and investments to purchase a first home. Quit trying to live the extravegant life by looking at huge, expensive houses. Get yourself into a starter home. You can sell that in a few years. The profit you make on the sale can be a downpayment towards purchasing a more expensive house but still staying within the same mortgage payment.

[CaptainObvious]

Originally Posted by Hopes

For extra money you use to invest, that makes sense.

But consider the money you spend in rent. That's wasted money that's doesn't have anything to do with your 401k. Spend that money on a mortgage instead. The house will appreciate in value over time. The money you pay now in rent won't be wasted if you spend it on a mortgage.

You're afraid. Have you even looked into this? Have you gone to a mortgage broker to find out how much you qualify for and at what interst rate? Sometimes you only need a 10k down payment for a starter home. You don't necessarily have to deplete your entire savings and investments to purchase a first home. Quit trying to live the extravegant life by looking at huge, expensive houses. Get yourself into a starter home. You can sell that in a few years. The profit you make on the sale can be a downpayment towards purchasing a more expensive house but still staying within the same mortgage payment.

I have. And I am told I QUALIFY for a $290,000 loan at prime rates. That DOESN'T mean I can afford it...I'm not going to let a mortgage broker decide what I am comfortable spending. The other thing that is a factor, that hasn't been disclosed, is that I don't know how long I'll be here. I am seriously considering moving out of state within the next two years and that makes buying all together very unattractive. If I could get a good deal, in a market that is "hot" relative to Pittsburgh terms, then I'd consider it. Otherwise, it makes more sense for me personally to continue to rent until I figure out where I'll be.

Cap

[juliegt]

Originally Posted by CaptainObvious

I have. And I am told I QUALIFY for a $290,000 loan at prime rates. That DOESN'T mean I can afford it...I'm not going to let a mortgage broker decide what I am comfortable spending. The other thing that is a factor, that hasn't been disclosed, is that I don't know how long I'll be here. I am seriously considering moving out of state within the next two years and that makes buying all together very unattractive. If I could get a good deal, in a market that is "hot" relative to Pittsburgh terms, then I'd consider it. Otherwise, it makes more sense for me personally to continue to rent until I figure out where I'll be.

Cap

Renting if you're only going to be somewhere for two years is sensible. Unless the market is showing signs of taking off. People who bought in the SF Bay Area soon after 9/11 and the dot.com bust did very well if they sold in 2004/2005. But, unless you have a crystal ball, I'd rent. If I was staying five years, I'd buy.

[Hopes]

Nothing is every HOT in Pittsburgh. It's a stable economy.

The good thing about that is you don't have to worry about losing money on a house.

We don't have busts in property values.

I wouldn't buy if I were planning to move in 2 years simply because of the hassle of closings.

[zip95]

Originally Posted by CaptainObvious

This is getting weird.

Having said that. I'm sure real estate investments out there somewhere can get me 40% gains. Then yes, even with the instantaneous doubling of the investment, real estate would be a better deal. I'm just not smart enough to find that investment. I have a home life, a real job, and life to attend to. So, I'll take my automatic match and an average of 7% a year. That makes my $100 investment worth about $12,000 in 40 years. With the relative minimal risk I have to take on to do it, I'll take it. I'll leave the extraordinary risk and the 40% gains to someone smarter, with more of an inclination towards risk than I.

Cap

Now that is completely understandable and rational. You understand your own situation better than anyone else...make sure you get all of the available information and don't listen to any of us, do what is best for you.

Originally Posted by CaptainObvious

I am told I QUALIFY for a $290,000 loan at prime rates.

Nice. You're in the game....do your homework because that number is real money...you don't want to mess this up.

[CaptainObvious]

Originally Posted by zip95

.do your homework because that number is real money...you don't want to mess this up.

This, unfortunately, is what makes my horribly risk adverse self lose sleep at night

Cap

[Katiana]

Originally Posted by Hopes

Nothing is every HOT in Pittsburgh. It's a stable economy.

The good thing about that is you don't have to worry about losing money on a house.

We don't have busts in property values.

I wouldn't buy if I were planning to move in 2 years simply because of the hassle of closings.

OTOH, you may not make any money in 2 yrs, either, as appreciation is not that great. Renting is definitely easier for short-term stays.