Buying a house according to one entrepreneur wouldn't be the smartest decision for a young adult to make. According to him those who buy homes when they are still young limit themselves because it'll take a really long time to pay for the house and with their cash tied up thusly, they won't be able to make any investments. His suggestion? http://www.theglobeandmail.com/glob...vestment-than-home-ownership/article24583446/ Sounds like a good plan.
It depends. The banks want people to buy a house so that way they get into debt and create business for the bank. As a result they want the person to buy as big of a house a possible. But usually these big houses are far from work, so the person spends 2-3 hours a day how much is that costing him. Like anything it depends on where you live, what is your job etc. If you are a long distance truck driver, and some of them make really good money. Buying a large piece of land in a rural area with a ranch style house on it might make sense. Since you are on the road all the time anyway, but then have a lot of time off, communting to work is not a problem.
Yes, sounds like a plan. But, only until they have enough funds to buy a house where the cost of the buying and maintaining the house is less than what they pay in rent.
There's a trend in house flipping right now. If a younger person has the capital and skills to do the work themselves, they can stand to make large profits buying foreclosed houses a rat wouldn't live in and then selling the renovated space. It's got issues of its own (gentrifying neighborhoods, for example, pushing lower class people out of their homes) but it's a solid strategy so long as you've got an eye for what profit can be had. Otherwise, I say eschew stocks for bonds at this age. While you're building a career and your savings, your bonds will be growing in value. It's not a lot of money but it's a start for later down the line.
I would also tend to agree with the original post. Buying a house these days isn't the be all and end all, and a lot of people are no better off, than they are when they first bought it. Buying a home as a financial assets can be very risky, not only would you be in danger of losing your money, in certain cases, if you live in that property aswell, then you'd be in danger of losing your home to.
Another thing that we need to consider when buying a home or property is the amount if money you need to pay it and all the necessary paperworks involved with it. It requires more amount of money and more effort to invest in a property than in stocks. The waiting time for ROI is usually longer in property investments too, so I think it would really be easier to invest first in stocks while a person is young.
Meh, the author just forgets about this very good way of doing things: get a house and invest. It's like he views the world in black and white... great journalism once again. At today's interest rates you are not forced to pay out your mortgage as fast as possible, hell nowadays a lot of banks are even offering you to "skip a year" where for 12 months you will not pay down the principal but just pay the interests. That might be taking it a bit too far, but I see nothing wrong in paying back your mortgage slowly while investing some of the extra money you have. I think that as soon as you have really figured out where you want to live for the rest of your days, then it's worth it to buy an apartment. Why pay rent into someone elses pocket when that same amount of money can be used to pay down your mortgage?
There's also a few small businesses one could start up relatively cheap on a budget limited by a mortgage. I live in the American South, and it gets hot here. Shaved ice moves quick and you can make quite a profit. I've looked into starting one and you can buy or build a towable stand for less than the price of a new Toyota, around $15,000. It's not terribly hard to get permits in most jurisdictions, either. For a small business idea it's not too risky and if you decide to fold and get out from under it somebody will be willing to buy the stand. Don't have to do just shaved ice - hot dogs or burgers go pretty well, maybe even coffee if you've got the inclination for that. Get a membership with the nearest Sam's Club or Costco to get your bottled drinks dirt cheap, and you've got a business going.
My thoughts are like this, if I can get some good money somehow, I'd rather buy house, what remains later, can go to investments and life is blissful henceforth right? Still I agree with the plan above... its a wise one
Real estate investing would be a wise decision if you can pay for the whole house in a few payments. That situation might come up if you won the lottery, saved up enough money, or inherited money. However, as the author claims, making a lot of payments for a home might not pay off. Well, for one thing, once the house is payed up, you would have to make enough from rent or reselling to get your money back plus a profit. It's a lot easier said than done.
