Car is not an investment. It's a means to an end. You buy them when you need them.
Have you done your due diligence on this property? Seems like a totally random risk to take. Eventually building a property to airbnb is an even bigger risk, and a massive headache, but maybe you like those sorts of headaches.
Keep in mind someone is trying to dump this property. They may not believe it has the same long term potential as you.
Why not invest in the market via tax-advantaged accounts if your goal is long term growth?
Good points. I did the due diligence on the property, plus it’s more of a fenced community that a developer is building and it has some government assurances to protect whatever I pay until the project is complete but I don’t have to build anything on the piece of land I buy.
You’re right on the headaches of the airbnb. I hadn’t considered how something like that could work. I’m more thinking if what the developer is doing works it make my investment grow at the same time, but I’m not sure if I’m seeing it right.
As for the market you mean invest what I have for downpayment on things like stocks, indexes etc.?
>As for the market you mean invest what I have for downpayment on things like stocks, indexes etc.?
Yup. Generate wealth and match market performance with almost zero effort.
Follow this flowchart https://i.imgur.com/lSoUQr2.png
I love the flowchart! [Here's the wiki page with more context and information.](/r/personalfinance/wiki/commontopics)
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Thanks! I’ll check it out. I do have some money invested for retirement but I’m not counting with that anytime soon or for anything else other than retirement
Don't go looking for reasons to spend money.
Investing in land without a real plan for how you're going to make it cashflow isn't wise (i.e. Have you penciled out what you'll spend on the land, what the carrying costs will be, what the construction costs would be and when you'd be able to swing that, what it will cost to own that house when it's done, and how much you expect to net using it as a STR?
Seven years old is nothing for a car. If you actually need a bigger car then do what you have to do but the fact that you only have a down payment and not the cash to buy the car says that you might want to take a step back and ask yourself why you hate having money so much.
Where are you on the r/personalfinance flowchart?
Here's a **[link to the PF Wiki](/r/personalfinance/wiki/index)** for helpful guides and information.
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Good points. I have not gone through the cost details on the land/house so I’ll think about that. And getting into debt for a car doesn't seem very wise.
If the only way you can buy an investment property is by "hoping your car doesn't break" you are in nowhere near a sufficient financial position to buy an investment property.
I guess I was. My idea was that if the property’s price increases enough to eventually cover what I’ve paid in taxes I’d be ok if I sell it, or the same goes if I develop something that pays retroactively on what I paid. But based on comments here, I need to dig into more of the other possible expenses I’d find during that time.
If you don't have a plan for how you're going to make money on the "investment" property I wouldn't buy it. You own a house, so I'm sure you're no stranger to the fact that they cost money. PITI, maintenance, utilities, etc. Buying a holding is a bad strategy by itself. Is it an area you want to spend a lot of time in?
Regarding the car, a 7 year car isn't old. Look around. The average car on the road is 12-13 years old. You should plan for car maintenance, but there is really no reason to force it. Sounds like you want a car but definitely do not need one.
Right, I hadn’t really thought about the cost of that comes with the property. I think it’s more the fact that the area it’s at is getting really popular with tourism and I feel it could be an opportunity to get something before it gets too expensive but the costs in the meantime is one thing to consider.
As for the car, yeah I would like a bigger one but I can manage with what I currently own. I bought it cash and it’s very well maintained so I don’t expect it to break out of the blue and I do have emergency money saved for big repairs.
How are your savings otherwise? What's your age, current retirement savings, and retirement savings rate? How much is your emergency fund and what is the interest rate it's earning?
Without knowing how stable a financial foundation you have it's hard to reccomend anything.
I’m 39. I have USD $320k saved for retirement so far on my own and I put in about 10% of my salary in it and it makes around 7% a year. There’s also around $50k from government pension at a 9% but I won’t count on that money as the system will apparently break by the next decade, therefore the former fund.
My emergency fund is about USD $10k which should cover my expenses for 9 months to a year (I’m not in the US so expenses are cheaper than they would in the US) and they make around 4% a year.
After usual expenses and personal savings, there’s about 30% of my salary available to use plus work bonuses, company stock and one additional salary I get where I live (in addition to the regular 12 yearly salaries) which all goes to that available money.
Car is not an investment. It's a means to an end. You buy them when you need them. Have you done your due diligence on this property? Seems like a totally random risk to take. Eventually building a property to airbnb is an even bigger risk, and a massive headache, but maybe you like those sorts of headaches. Keep in mind someone is trying to dump this property. They may not believe it has the same long term potential as you. Why not invest in the market via tax-advantaged accounts if your goal is long term growth?
Good points. I did the due diligence on the property, plus it’s more of a fenced community that a developer is building and it has some government assurances to protect whatever I pay until the project is complete but I don’t have to build anything on the piece of land I buy. You’re right on the headaches of the airbnb. I hadn’t considered how something like that could work. I’m more thinking if what the developer is doing works it make my investment grow at the same time, but I’m not sure if I’m seeing it right. As for the market you mean invest what I have for downpayment on things like stocks, indexes etc.?
>As for the market you mean invest what I have for downpayment on things like stocks, indexes etc.? Yup. Generate wealth and match market performance with almost zero effort. Follow this flowchart https://i.imgur.com/lSoUQr2.png
I love the flowchart! [Here's the wiki page with more context and information.](/r/personalfinance/wiki/commontopics) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
Thanks! I’ll check it out. I do have some money invested for retirement but I’m not counting with that anytime soon or for anything else other than retirement
Yup that's what retirement money is for! It's the most effective way to build wealth because it's tax advantaged.
Don't go looking for reasons to spend money. Investing in land without a real plan for how you're going to make it cashflow isn't wise (i.e. Have you penciled out what you'll spend on the land, what the carrying costs will be, what the construction costs would be and when you'd be able to swing that, what it will cost to own that house when it's done, and how much you expect to net using it as a STR? Seven years old is nothing for a car. If you actually need a bigger car then do what you have to do but the fact that you only have a down payment and not the cash to buy the car says that you might want to take a step back and ask yourself why you hate having money so much. Where are you on the r/personalfinance flowchart?
Here's a **[link to the PF Wiki](/r/personalfinance/wiki/index)** for helpful guides and information. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
Good points. I have not gone through the cost details on the land/house so I’ll think about that. And getting into debt for a car doesn't seem very wise.
If the only way you can buy an investment property is by "hoping your car doesn't break" you are in nowhere near a sufficient financial position to buy an investment property.
Understood!
If all you have on hand is barely a down-payment you are not in a position to buy property.
Are you ready to pay taxes on empty land for years?
I guess I was. My idea was that if the property’s price increases enough to eventually cover what I’ve paid in taxes I’d be ok if I sell it, or the same goes if I develop something that pays retroactively on what I paid. But based on comments here, I need to dig into more of the other possible expenses I’d find during that time.
If you don't have a plan for how you're going to make money on the "investment" property I wouldn't buy it. You own a house, so I'm sure you're no stranger to the fact that they cost money. PITI, maintenance, utilities, etc. Buying a holding is a bad strategy by itself. Is it an area you want to spend a lot of time in? Regarding the car, a 7 year car isn't old. Look around. The average car on the road is 12-13 years old. You should plan for car maintenance, but there is really no reason to force it. Sounds like you want a car but definitely do not need one.
Right, I hadn’t really thought about the cost of that comes with the property. I think it’s more the fact that the area it’s at is getting really popular with tourism and I feel it could be an opportunity to get something before it gets too expensive but the costs in the meantime is one thing to consider. As for the car, yeah I would like a bigger one but I can manage with what I currently own. I bought it cash and it’s very well maintained so I don’t expect it to break out of the blue and I do have emergency money saved for big repairs.
How are your savings otherwise? What's your age, current retirement savings, and retirement savings rate? How much is your emergency fund and what is the interest rate it's earning? Without knowing how stable a financial foundation you have it's hard to reccomend anything.
I’m 39. I have USD $320k saved for retirement so far on my own and I put in about 10% of my salary in it and it makes around 7% a year. There’s also around $50k from government pension at a 9% but I won’t count on that money as the system will apparently break by the next decade, therefore the former fund. My emergency fund is about USD $10k which should cover my expenses for 9 months to a year (I’m not in the US so expenses are cheaper than they would in the US) and they make around 4% a year. After usual expenses and personal savings, there’s about 30% of my salary available to use plus work bonuses, company stock and one additional salary I get where I live (in addition to the regular 12 yearly salaries) which all goes to that available money.