What should I invest in?
I plan on refinancing my home and taking out 50k. What should I invest in? I would like to buy and rent out a multi family home. Or invest in stocks. Not sure what to do with that money. What's my best option?
- WillieLv 72 weeks ago
I recommend toilet paper stock because we're going to have a second and third wave of COVID-19.
- BillLv 42 weeks ago
Suggest meeting with a professional financial advisor before getting too far into your plan. Discuss what you think you want to do and see if your plan is feasible. Most banks have an advisor on staff, or can refer you. Quite often there is no fee for the first consultation and if you do decide to invest in the stock market, can do that for you.
Watch that you don't get into speculation with your money, or get over extended. Both are easy to do. Valid reasons to refinance are to lower the interest rate or to shorten the remaining payback period. A lot of that decision relies on how long the mortgage has been in force and how much remains. Having cash to invest is appealing, but be realistic. $50k won't go too far when buying housing, and stocks are relatively expensive right now, so be sure.
If refinancing isn't feasible, consider taking our a Home Equity Line of Credit (HELOC) for the equity. You don't have to use it, just have it as a cash source if an emergency or ideal investment comes up.Source(s): Refinanced three times, got either a lower interest rate or a 15 year loan instead of the 30 year one. Used the money for kid's college and stock investments as I could get both low interest and the market was at a low point (i.e. stocks were on sale).
- SumDudeLv 73 weeks ago
I am conservative - so none of the above. Stocks had a big recovery in Jan/Feb, but unknown what they will do now. Buying a multi-family home for only $50,000 down would be hard. Hard to meet the mortgage if renters move out / do not pay / you have no renters. Keep your own mortgage low.
- SteveLv 63 weeks ago
Dont do the home deal. Too much potential headache for those who try that. Go with stocks. That is much less sweat from your brow. You just have to choose wisely. The gains that you can have far outweigh what you will gain in a house. Sure, youll get money out of the house, but not likely double, triple or even more your money as with stocks.
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- A HunchLv 73 weeks ago
Do you want to be a landlord? It's far from passive income.
You won't find a multi family for $50K, so would you be able to get an investment loan on top of your existing mortgage?
- Anonymous3 weeks ago
I personally don't have an issue with you having a low-cost mortgage and investing cash elsewhere. That's exactly what I've done for 30 years and I've made a mint. The beauty of owning a home is that it's a leveraged investment. Your asset appreciates at 100% of it's value even though you've only invested a portion of that. It allows you to invest your cash elsewhere at a higher rate of return (over a LONG period of time).
As far as where you should invest your money, you've said absolutely nothing about yourself. How do you expect anyone to give you advice? Are you 30 or 70? What is your risk tolerance and time horizon? Do you need income or are you looking for appreciation? Do you want (another) job because that's what managing and maintaining rentals is. Do you have the cash flow to weather rental vacancies, dead-beat tenants and repairs? Or would you rather scrap all that and put it in the stock market? Can you stomach the value of your investments going down by 40% and staying that way for five years? Would you panic sell or would you recognize it as a great buying opportunity?
If you can't figure out what type of direction you want to go with that 50k, it sounds like you need to truly educate yourself so that you are more equipped to make the decisions that are best for you. No one has a more vested interest in your success than you do.
- kswck2Lv 73 weeks ago
NEVER invest money that you cannot afford to lose.
- Anonymous3 weeks ago
A case can be made for not borrowing to invest. Particularly when you don't have a clue what you are doing.
Real Estate should have higher long term returns but that involves headaches. Evictions & repairs.
An S&P 500 index fund SHOULD outperform your cost of funds over the long term. But can you live with a 20-30% decline first?
I own my house outright. Not having a house payment is the gift that keeps giving.