Need some thoughts on this plan.

JR · Posted: Tue Sep 07, 2004 2:40 pm Post subject: Need some thoughts on this plan.

As you guys know from my previous posts, my husband and I are due to inherit some money from a deceased relative. You have to keep in mind, it is my husband who does not believe Peak Oil is a future issue. He does not want to apply the money to our mortgage, won't even consider it. So, we have been throwing around ideas of how to invest the money. It's not a huge, huge amount...should be about 50-60 thousand after taxes. Anyway, we have possibly come to an agreement. Something he likes, and something I feel may be helpful in the future if TSHTF with Peak Oil.

In the rural farm town we live in, rental homes and property are big business. There are some people who make a living off of just owning large homes which they have turned into 2-3 apartments. Or, small homes which they buy and rent out.

We are toying with the idea of taking all the money and buying a small home outright. You can find a small 2 bedroom home here for 50-60 thousand which doesn't need a whole lot of work. You can find some for less that need some work. Taxes are very cheap here as are utilities.

We are considering doing this, then renting it for income. One reason I am liking the idea is...if we find ourselves unable to pay our own mortgage in the future because of jobloss, etc...relating to Peak Oil...we would have this home to move into. If this does not happen and we are able to keep our home, we would then have some income from the rental house.

Is this a stupid idea? Please say so if it is. I would really like some feedback on this.

Thanks.

Jodi

Viper · Posted: Tue Sep 07, 2004 3:37 pm Post subject:

I would say you're better off putting 20% down on 5 homes and renting them out. The people living there pay the mortgages and after 30 years you own 5 properties. I would worry about the real estate bubble though. Might want to wait a little bit on buying real estate.

An even better option might be spreading the risk. Down payment on 2 homes, some cash in bonds, some in stocks, and some to play the oil markets with Razz

Disclaimer : Viper is not now nor has ever been a financial advisor. Take or leave said advice at your own risk.

-Viper Twisted Evil

buster · Heavy Crude Joined: Aug 12, 2004 Posts: 144

as I have never seen $60 thousand in one place in my life, I think you should drop your non-believer infidel hubby and run away with me, we'll open a windfarm in Mexico.
_________________
http://www.openspeech.org - please visit and post!

JR · Posted: Tue Sep 07, 2004 4:43 pm Post subject:

Well, now, buster...I'd have to see a pic to make up my mind! icon_wink

gg3 · Posted: Tue Sep 07, 2004 9:06 pm Post subject:

Yeah, JR, and Buster's picture will also help your husband with target practice!:-).

I'd say buy two small houses, with as large a downpayment as possible on each. Rent them out at a fair profit and use that additional money to pay off the mortgages as soon as possible. ALWAYS get a FIXED-rate mortgage, and NO "balloon payments" or "early payment penalties." Even if these requirements require a compromise on interest rates, i.e. paying a higher rate than otherwise, the fact is that if rates skyrocket, you will still be safe; whereas with a variable-rate, you could be screwed in no time, and balloon payments & early-payment penalties are just the same screw with different screwdrivers.

If life continues as normal, you have a good source of ongoing income with full redundancy (i.e. you can take one house out of the rental market to fix it up while still deriving income from the other; and you can rent out one and live in the other if need be). If the fertilizer hits the ventilator, you have a house for yourselves and one to rent or to share with close friends and/or relatives in need.

Disclaimer: I am not a financial advisor, check all informal recommendations with your financial advisor and tax advisor.

JR · Posted: Wed Sep 08, 2004 3:05 am Post subject:

Heehee, my husband does like to do target practice...except he has a big gun, a 45!

Anyway, thanks for the thoughts on my idea. We are going to look that route. PErhaps two small homes. I'm going to check into perhaps even purchasing something that may be in bank foreclosure as those can be obtained pretty cheap.

It beats my hubbies other idea....a mini-golf course. Rolling Eyes

Jodi