AdrianParticipantStatus: PhysicianPosts: 42Joined: 01/05/2018
We have about 275k new money to invest. We maxed everything out and have a taxable with Vanguard already.
We do not have any RE exposure in our portfolio except for a little REIT in one of our retirement accounts.
With the current market volatility I am afraid to throw them in the taxable (already contributing a good portion of every paycheck automatically).
Problem is where we live the 1% rule is unattainable. The hottest neighborhood for renting has many townhouses in the range 280k -320k. We could stretch and buy one outright or just use part of money and finance one with 30-40% down. Problem is they only rent for $2000 a month. If we hire management company (10%), we would barely break even. But still the money would be invested in something more stable and gives us the diversification we need.
Thoughts?January 10, 2019 at 9:47 am MST #180170wonka31ParticipantStatus: PhysicianPosts: 603Joined: 03/24/2018
Do you want to enter into real estate or is this somewhat reactionary due to the market recently? The only reason I ask is because you directly discussed your concern of the market volatility.
If locally it doesn’t make sense then don’t buy local. You can do either a long distance direct investment or look into real estate syndication. The example property you discussed above sounds like a poor plan. It’s cash flow neutral/negative and you’re banking on appreciation of the property which may or may not beat indexing. Also, owning one property doesn’t add diversification, it adds an isolated rental property to your assets. Many people who do direct ownership will use the cash flow of property one to pay for property two, three and so on.
If you’re looking to get into real estate, start doing tons of homework.jfoxcpacfpModeratorStatus: Financial Advisor, Accountant, Small Business OwnerPosts: 7509Joined: 01/09/2016
With the current market volatility I am afraid to throw them in the taxable (already contributing a good portion of every paycheck automatically).Click to expand…
If you are looking for an investment without volatility, try cash. Volatility is what fuels growth in a well-balanced portfolio.
Agree with wonka31 – start doing LOTS of homework before you dip into real estate.
Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
https://fox-cpas.com/for-doctors-only/PedsParticipantStatus: PhysicianPosts: 3789Joined: 01/08/2016
so you want RE but dont want to manage RE?
just add more REITs.
and go back and read the thousands of posts on bogleheads on lump sum DCA volatility.
or the few here.
the answer is always the same.January 10, 2019 at 10:42 am MST #180197KambanParticipantStatus: PhysicianPosts: 2253Joined: 08/01/2016We do not have any RE exposure in our portfolio except for a little REIT in one of our retirement accounts. With the current market volatility I am afraid to throw them in the taxable (already contributing a good portion of every paycheck automatically).Click to expand…
Problem is that you are not getting into RE because you love it or like it. You are getting in because you are afraid of stocks. That is a poor reason to get into RE. If you cannot stomach this market volatility how will you bear another 2008 like housing crash, soon after you have sunk in $275K.
If you are a couple of decades or more away from retirement this might be the time to invest in equities, now that there has been a pullback. Not in housing, which is at all time high. Your call.