Hi! New to this page and would love some advice on my situation.
Just turned 25yo
160k NW, (the following numbers are approximate:)
75k investments
30k crypto
10k hysa
2k precious metals
43k cash (6mo of 5k necessary living expenses & a lil extra… and yes writing this out now I realize maybe I shouldn’t keep this much in cash)
150k yearly income
Mid 700s credit score
No kids no pets no spouse
<9k student debt which I’ve already substracted from NW
Goals:
1. 200k+ NW & new car by end of 2026
2. Diversify my sources of income (and make more $)
3. At least barista fire by 40yo (if I could full fire sooner that would be great, but at my current income/expense level this seems doable)
4. 800+ credit score
5. Own at least 1 investment property
6. Still enjoy my life while planning for the future
I have always been interested in owning property one day. I am not sure where I want to settle down yet so I am not necessarily looking to buy my first home, more so interested in house hacking. I’ve read I can get an FHA loan and put as little at 3.5% down & get a 5-6% interest rate as long as I live in it the first year and meet other requirements.
Context:
My parents have never bought any property, I am their eldest & 1st gen american so I am learning all about finances and the us financial system as I go along.
We live in a HCOL area. Houses that once cost 2-300k when my parents first moved here now easily go for well over 1M+, and I see my parents are stuck renting at prices they can now barely afford. They are hitting their 60s and do not think they will be able to retire in the next 5 years.
My takeaway from their situation is that I should take my finances seriously and also try to own property instead of renting forever. While that makes emotional sense for me, I’m not sure if it makes logical sense in my case which is why I’m here to ask for advice.
I would love to buy a 2/3/4plex, live in one unit & rent out the others – but is that something I am in a stable enough financial position to attempt? Or should I give myself a few more years to build a more solid foundation? If so, at what point would it be more reasonable to start to look into buying property (like is there a certain amount of $ I should reach in savings and investments before trying?)
Also, since property near me is expensive, should I look out of state or potentially abroad (I have dual citizenship)? If I were to look out of state, moving there could be a possibility as my job is pretty flexible.
I’m sorry if this post is all over the place, but any advice/input is greatly appreciated thank you 🙏
25yo Interested in buying property but not sure if it’s the right choice
byu/SavingsInevitable567 infinancialindependence
Posted by SavingsInevitable567
5 Comments
Also I made a new acc to post this bc I personally don’t want info on my finances tied to my other Reddit acc I swear I’m not a bot 😭
Are you willing to live with roommates? If so, you can accelerate the house purchase a little bit because they will be helping pay your mortgage.
How new on a new car? Like a used new to you one or a new new one? Anticipate a monthly payment of $500/month or more. Those little ninjas are expensive
You’re financially ready but house hacking in a HCOL area where homes are $1M+ is rough even at your income. The math usually doesn’t work unless rents are crazy high. Look out of state in growing markets where you can actually cash flow. FHA works but you need to live there a year, so pick somewhere you’re okay relocating to temporarily. Places like Texas, Florida, or parts of the Midwest have better numbers.
Buy multi family home and live in one. Make sure rents can cover your mortgage payments
If you live there you can put down as little as 5% (versus 20% on income properties you don’t live in). Find a neighborhood that is “coming up” with business and people starting to move there
Hire a property management company if you don’t want to deal with the tenants
Over time you can move out and keep it as investment property
I’ll be honest with you. You’re too young and you can’t afford to buy in a HCOL area right now. Keep renting and saving/investing aggressively. Reasses in 5 years.
Buying a home doesn’t make sense at this stage in your life.