HELP!
there is a duplex for sale in my town and i want to buy it and live in one half and rent the other out. They want 75k for it and i can pay in cash. The Realitor said that not alot of people have bidded on it cause not alot of people can afford it. I just want to know if that is a good idea or not. People also told me that i would make more money doing that then leaving my money in a mutual fund.
CONFUSED!!!!
Even if you borrowed the money to buy the duplex (no problem getting a 100% loan with 200k in liquid assets) your payment would be considerably less than your current rent. If you would be just as happy living there, I would say go for it- but be sure to make your offer contingent on an inspection, then hire a reputable home inspector to make sure that there are no hidden problems with the place.
One advantage to living in the duplex is that you can put whoever you want in the other unit, without having to worry about fair housing laws.
Chris
Actually 2000 a month on 200K is about a 12% return- you could borrow for under 7% and write off half the interest. I would keep most of the money in the mutual fund, put 20% down and borrow 80% (lower interest and no mortgage insurance). I think you will wind up with the most money that way- as long as the mutual fund keeps returning more than the interest you are paying.
Chris
so you dont think i should just pay cash for the duplex???
Quote:
On 2006-04-28 18:11, ypochris wrote:
Actually 2000 a month on 200K is about a 12% return- you could borrow for under 7% and write off half the interest. I would keep most of the money in the mutual fund, put 20% down and borrow 80% (lower interest and no mortgage insurance). I think you will wind up with the most money that way- as long as the mutual fund keeps returning more than the interest you are paying.
Chris
Not if you are getting a 12% return on your current investments, and expect to continue to do so. Why use money that is earning 12% for you if you can borrow money for 7%? And get a tax writeoff to boot?
Chris
i see what you mean now, and plus it will give me some credit cause i do not have any right now!!!
ypochris has the right idea, borrow 80%, put 20% down. No PMI, more leverage then if you bought in cash.
well i decided against it because the house market or whatever is not good right now. They also want 2000 dollars a year for taxes! so im just going to get an apartment and wait till my money grows, in about ten years so i can buy whatever i want.