Investments

Avatar for travinski
iVillage Member
Registered: 05-21-2004
Investments
2
Wed, 02-16-2005 - 4:38pm
I once heard that you shouldn't wait until you are completely out of debt to make an investment and in fact, if you play your cards right, you could get out of debt faster. I own my own house and I work all day and three or four nights a week. I can't stand it. I am renting a room in my house which will help me pay for half the mortgage payment. I am thinking of buying a property near the university but only if it has been rented a lot in the past and is LOW MAINTENANCE. I just saw one property that would bring in $17,000 a month because it has five bedrooms. I would be able to work part-time after I got out of debt. What do you all think? Am I nuts?

Travi

 

iVillage Member
Registered: 02-19-2004
In reply to: travinski
Wed, 02-16-2005 - 4:51pm
Do you mean $1,700 per month? Or is it $17,000 per year? I think you have to look at how much you'd be borrowing to buy the property, and the net amount you'd be bringing in. How is your credit score? Can you get a good mortgage rate? You will need to qualify for a second property, and there may be an income test to ensure that if you had a month with no renters, you would be able to still make the mortgage payment. If you know you can clear several hundred each month, then yes, you'll have more money to pay down your debt with. If you were making an investment other than in real estate, I'd say compare the median interest you expect to earn with the interest you are paying on your debt, and usually when you do that it makes more sense to pay the debt off first.

Photobucket

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
In reply to: travinski
Thu, 02-17-2005 - 9:35am

Check out the Planning and Investing board - it's a great resource for investment questions:

All my best,
Danni