I’m 22 make 120 K a year and I maxed out my 401(k). I’m allowed to live with my parents as long as I want and I plan to live there until at least 25. I have 100 K in my Roth 401(k) 32K in my savings and 6k in an investment account. I wanna make my money work for me and make more money. I’m just not sure what I should get into.
Should I buy a duplex and continue living with parents at 22
byu/Powerful-Success-602 inpersonalfinance
Posted by Powerful-Success-602
25 Comments
https://www.reddit.com/r/personalfinance/w/investing
Renting property is an actual job it’s not just buy it rent it out get money. If you’re up for managing the property, making repairs, making sure it has tenants who will pay rent on time plus all the other responsibilities that come with it go for it, but otherwise you can get great returns from investing without the hassle.
if you want to be a landlord then yea go for it.
Put extra money into brokerage. Keep pounding savings while living at home. You are very lucky & can set yourself up super well by saving 80% for the next 3 years. I would still rent when you move out until you know & are comfortable living on your own. There’s literally no rush to buy, housing isn’t cheap to own or rent.
Hell yea! You’ll be laughing at the starter home buyers in 10 years.
Yes continue living with them but help them out. And invest the money you are saving.
r/bogleheads might appeal to you- you have strong earning power and putting more into tax efficient index funds over the time you have to let them grow will be easier than managing a rental property where you’ll need a lot more cash in case something happens and needs fixing.
Take advantage of by our biggest weapons- a really good salary with minimal overhead and time. Even if VTI returns 10% over threee years and not closer to the 20% of the last couple years your money will grow tremendously with discipline and regular buys of shares
No. Being a landlord is a JOB, it’s not passive.
Open up a brokerage account and pick some stocks, or invest in a dividend paying REIT for income.
Dang, you will be loaded at retirement. You’re already the type to be successful. If you’re 22 and you can delay gratification like this, I’d be surprised if your net worth doesn’t hit 10 million in your lifetime.
Don’t miss out on your 20’s and don’t lose sight of what actually makes people happy. Personally, having a family is WAY more fulfilling than money ever will be. You’re already top 1% when it comes to money.
I dump everything into market weighted indexes. It returns better than any other investment for the amount of work required.
Off topic. But what do you do to make bank like that at 22 ?
Most places you should be able to get a 2 BR condo if you stack some paper. Great setup to run a room mate for a couple of years.
As a landlord, that shit isn’t cheap.
You’re already looking at 10k-20k in origination and closing costs for purchasing the place. Interest rates are “low” at 6%
Then you need to have the house ready for renters, then be able to manage your renters. We are fortunate enough to have friends who rent it at a discount, but I will definitely not be seeing a profit this year on it
I just sold my rental duplex, after about 10 years. Tenants are a real crap shoot. At first I rented one side to my dad and the other to a co-worker who was building a house. First year was great. When my co-worker moved out, rented that side to a young couple. When they moved out, we had to bag up piles of used diapers into about 3-4 trash bags, among other things. Not trying to scare you off, but if you do this, consider a management company to help vet tenants.
tl;dr vet the crap of potential renters if do this. and there is always something.
In my opinion coming from a guy who lived with his parents till 29. I got married and then lived in a apartment with my wife and child for 3 years then bought a townhome. You want to save as much as you can. Being a landlord will make you work. I do not know what you do now but imagine getting a call in the middle of the day or night that a toilette broke or a water line erupted. Keep on investing in savings, roth, or stocks.
I thought about rental properties early on too, but realized how much work and risk there is involved by the time I had money to do it. Just invest it in VOO or something similar. Meaningful investments at your age will put you so far ahead of others in getting setup for an early retirement.
More on the personal not asked for opinions side… but still living with your parents when making that much seems crazy to me. I did everything possible to not do that and live as an independent adult after college, all while making a small frsction of what you do and paying down student / car loans. Saving and investing early is valuable, but so is becoming a self sufficient adult.
as I stated everywhere, be as cheap as possible as long as possible. If your parents are nice enough for you to let you live there as long as possible, do it as long as you can and make sense.
Do not buy stupid things(including fancy car).
OBviously be super frugal and invest as much as you need to. Also shower your parents w/ your love and appreciation. Also as long as you live under their roof, cool off on dating(especially brining someone to your parent’s house).Do not take shit for granted.
No you shouldn’t. Stay in the stock market. Diversify later. Use grok or other AI to crunch the numbers if you want it to tell you the same thing. $120k income and 32k liquid cash isn’t a position I’d be comfortable buying a property in. Unless it’s a trash heap, you’d probably have PMI unless you dig into the 401k to help. Which isn’t worth doing.
Look at this when you are making $200k+ and have 6 figures in your liquid savings.
Renting can be a nightmare. Tenants destroy properties, and it can be a ton of work. If you’re going to buy a duplex and live in one side, I can see an argument, but to me personally after helping my parents with their rentals and seeing what tenants can do if you let the wrong one in, I’d recommend you just put your money in a low fee index ETF. You’re going to get similar returns without the headache.
Do you enjoy house maintenance and going to court? Then become a landlord.
I would save up for a place that you can buy, live in, and rent out a room. I did this and no regrets. I have no plans on buying a straight rental property ever
No, just keep saving either for a down payment, or simply padding a taxable investment account. Given you don’t plan a specific buy date, you can invest in index funds and be flexible on when you either buy a “duplex” or just keep investing.
IMO, stocks are currently a better investment than real estate, and if you don’t overthink it, passive investing is almost 0 effort.
Why not buy a duplex so you can live on one side and have your parents live on the other side?
Living with parents often comes with space/boundary challenges, even if everyone is chill and gets along well.
A buddy of mine did this and is basically retired at 35. He went full time land lord about 8yrs ago.
Buying a property is buying yourself a second job.
Invest in index funds instead. That’s your money working for you.
You should also be maxing out a Roth IRA and then sticking the rest of the money in your taxable investment account.
What career are you in? That’s impressive for your age