Should we purchase a house?

Submitted by tutmencrut t3_127qavb in personalfinance

Currently living in a house that my work is providing. As long as I keep this job, we can live in this house.

We can afford buying our own house with a mortgage. If so, we are planning to rent out the new house for extra income. The new house also will be our safety net should things go wrong with my work.

Does this make sense? Or should we just invest in stock market what would have been our deposit and monthly payments?

More info:

  • We are married; we have two toddlers; we are in our mid thirties.
  • The house we are living is great, enough room for everyone.
  • The area we are living is booming, housing projects popping out in every corners or town.
  • We have a combined $200k in stock market.
  • We have a healthy emergency fund.
  • We are contributing to our retirement funds.
  • We are making enough; but if we have a mortgage, we will not be able to contribute to our investment accounts as much as we’d like to (we can still contribute to our retirement accounts).

*Edited for clarity.

Thank you!

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WingedBeagle t1_jef9kb4 wrote

Does your work allow you to rent out a house they’re providing to you? That’s kind of a big part of the plan, considering they’re letting you live there contingent to you working for them.

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tutmencrut OP t1_jefdt6o wrote

No, we cannot rent out the house from my employer; we will rent out the new house.

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WingedBeagle t1_jefhzo6 wrote

Makes more sense, sorry for misunderstanding

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tutmencrut OP t1_jefi75r wrote

I wasn’t being clear; apologies! Other commenters were also confused, so I edited the post for clarity.

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SpiritualCatch6757 t1_jefbf46 wrote

I would invest. If you think about, you're just asking if you should diversify into real estate. To me, that's a personal thing.

When things go well family and friends tell me that taking care of rental properties is no big deal especially when they use property managers. And then when things don't go well, they complain about this renter not paying or that rental needing repairs. My investments? They don't ever ask me to leave in the middle of a family gathering to take care of an emergency. I can spend a lot of time managing my investments or I can set them to auto contribute.

Some may argue there is greater return on real estate. Some may disagree. I neither disagree nor disagree. I just don't want to be hassled. Taking care of maintenance on my primary home is plenty hassle enough.

Good luck, OP. No wrong decision here. That you have the funds to do either means you're way ahead of the game of life.

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kbc87 t1_jefd5dk wrote

Do you want to be a landlord or would you rather just invest that money elsewhere?

Guessing you mean buy a house and rent that house out? I doubt your work would let you rent out a house they are providing you.

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tutmencrut OP t1_jefh521 wrote

Yes correct, will rent the new house.

Our thinking is that buy the house now and rent it out. If things go wrong with my work, we have something to fall in to.

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blacklassie t1_jeffo2l wrote

As an investment, real estate is entirely dependent on local conditions. If your area is booming, how sustainable is that growth? Is it tied to a specific industry? Also, do you want to stay in this community for the long term?

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tutmencrut OP t1_jefhzp9 wrote

I don’t know enough to understand how sustainable the current growth is. How do I research this subject?

Yes, we are planning to stay in the community long term.

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Idbetmylifeonit t1_jeg2tde wrote

One thing to consider is if something goes south with your job quick, how long until you have to be out of the employer house?

You need to consider how long that period is compared to how long it would take you to get the renters out of your house. What if they are 2 months into a year long lease? Can you afford to rent something for your family long enough without your job?

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tutmencrut OP t1_jegkqr5 wrote

Yes; we can afford it; my wife is also working.

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