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Don't forget the down payment you'll need for a house (conservatively, 20% - potentially more as a foreign investor) and another 1%-5% of the purchase price in
by garethsprice 15y ago
Don't forget the down payment you'll need for a house (conservatively, 20% - potentially more as a foreign investor) and another 1%-5% of the purchase price in fixing stuff that's inevitably broken or in need of upgrading. Given how mobile you are, buying real estate to live in might not be a good thing for you. I bought at a similar age, and it's definitely a major consideration when considering moves now.
Real estate as an investment provides quite fantastic leverage (no-one's going to lend you 80%+ of your capital to buy stocks) and is a great way to build long term wealth, but make sure you have enough cash around to avoid getting into trouble if something major breaks or to pay the mortgage if your property is vacant for months at a time (especially if you're doing vacation rentals). Take what you estimate you'll need as a cash buffer, and triple it.
Don't underestimate the hassle involved with absentee landlording, even with a property management company. The property management industry, especially at the lower end (single unit residential or vacation rental) is largely unregulated and there are plenty of horror stories about corrupt managers who skim rent, take kickbacks, etc - or just collect rent for several months and disappear.
Highly recommend anything by John T Reed (johntreed.com) or William Nickerson (out of print) to learn about real estate as an investment. The field is full of scammers and smoke-blowers (even moreso than tech...). Those two stand out as offering pragmatic, actionable advice.
I really like the slow-paced, long term wealth building approach of real estate combined with the fast-paced, high cashflow, low equity field of tech consulting. It's early days for me, but the combination seems to work well together.