If I Had $300k Should I Buy a House Outright With Cash?

[Sean K]

Why cant you have both?

You can.

Didn't seem to be the direct question to me.

But, they are VERY different mindsets.

An 'investment' can be a piece if rock in another country.

A 'home', is your sanctuary, surrounded by your family and friends, imo.

Your home can be an 'investment' of course, but that's not always the case.

My ideal 'home' is not an investment for example.

If you've got the finances to have both, well and good.

On the information provided, I'm not sure if the $300K downpayment on a 'home', and an 'investment' property, wherever it is, could cover both.

Maybe he's earning $150K + a year and it will work.

You'd be better at the sums though tech. Maybe you need to start another company...

 

[Timmy]

Buy a Porsche.
You know you want to.

 

[Sir Osisofliver]

@Gfresh & Pepperoni...a few things


1) I'm not getting paid.
2) I don't know his circumstances
3) I was trying to make it simple to understand
4) I'm not allowed to provide advice here.
5) My Real estate, Share Market and Fixed Interest forward projections are propritary information which I will not disclose.

What I wrote is an EXAMPLE of the process what Spanning Tree needs to do for himself. Hopefully this just helps him get there a little easier.

Good Luck

Sir O

 

[tech/a]

This is also nuts - the term deposit will struggle to get 8% and has some level of risk but most importantly you pay tax (which will almost certainly outweigh any negative gearing).

Money into mortgage is not at risk (apart from property value risk that exists in both scenarios) and with rates around 9.5% IF you have a mortgage money to pay it off is like getting a 19% risk free return. Its the best investment by far IF you are already lumbered with a mortgage.

Its all these hairbrained schemes that contribute to the property bubble ... the system should be simplified to save people from their own brilliant schemes.

Hahaha.
I love these posts by "Token Multimillionairs!" (Pepperonie's words).

In fact its solid numbers like these(Which can be even MORE positively skewed with sound Tax planning AND a rent roll)---that will turn the few into Real Multimillionairs.

 

[Sean K]

Still must harp back,

Is this just an investment question?

There still hasn't been a qualification of this from the poster, nor his overall financial position and prospects.

Otherwise, it's all ......

??

We could all have a different plan for $300K...

 

[nioka]

Not agreeing or disagreeing, but I'd like to see that substantiated with some numbers.

It worked OK for me. I basically retired about 30 years ago. (retired means being self supporting and doing what you want to do when you want to do it.. It gives me the security of property with sufficient income and capital gain. Extra income for the extras comes from the stock market, a good year means a new car, boat, holidays etc. A bad year means you sit it out comfortably. Numbers? Not for publication. Why are numbers important ?

 

[pepperoni]

Hahaha.
I love these posts by "Token Multimillionairs!" (Pepperonie's words).

In fact its solid numbers like these(Which can be even MORE positively skewed with sound Tax planning AND a rent roll)---that will turn the few into Real Multimillionairs.

Its spelt "millionaire" ... id know and you wouldnt though;-).

Ill make you one too if you can tell me which ones are the solid numbers and explain why? They look so patently wrong its absurd!

 

[professor_frink]

I'd buy the house and try and focus on things that don't involve large amounts of debt and having to be at work for a big chunk of my life.

Looks like I'm in the minority here though!

 

[Sean K]

The Gorilla and I are going halves in a pad on the Mornington Peninsula, close enough to the beach to be able to wander down, buy some fish and chips, and watch the sun go down with a cold one....

 

[Fleeta]

Suppose hypothetically I had $300,000 in cash sitting in a savings account in my bank. The savings account produces interest, which is taxable.

Suppose I wanted to buy a $300,000 house in Craigieburn...

You're all missing the point. Clearly if you want to buy a house in Craigieburn, you are a bogan. I hope for your sake it is an investment and you don't really want to hang out with the moccie and tracksuit crowd in Craigieburn! How did you come accross the $300k? Drugs or stolen goods?

 

[professor_frink]

The Gorilla and I are going halves in a pad on the Mornington Peninsula, close enough to the beach to be able to wander down, buy some fish and chips, and watch the sun go down with a cold one....

Sounds like a pretty good plan to me

 

[pepperoni]

I'd buy the house and try and focus on things that don't involve large amounts of debt and having to be at work for a big chunk of my life.

Looks like I'm in the minority here though!

Im the same ... I dont want a 30 year mortgage because the risk of a bad recession and or being out of work for a long time in that period I consider to be very high.

Ive had 2 houses and 2 mortgages ... 4 years and 18 months. I wont borrow any more than I can pay in about 4 years next time either.

 

[Fleeta]

Its spelt "millionaire" ... id know and you wouldnt though;-).

Ill make you one too if you can tell me which ones are the solid numbers and explain why? They look so patently wrong its absurd!

Pepperoni - don't you mean 'blatently' and not 'patently'? Kettle..pot..black?

 

[pepperoni]

You're all missing the point. Clearly if you want to buy a house in Craigieburn, you are a bogan. I hope for your sake it is an investment and you don't really want to hang out with the moccie and tracksuit crowd in Craigieburn! How did you come accross the $300k? Drugs or stolen goods?

Ha ha .. he is saying if he had it.

Im more worried about the expert financial engineering on this thread

 

[Sean K]

Sounds like a pretty good plan to me

Thirds then.

Maybe there'll be a really really fast train by then....

 

[pepperoni]

Pepperoni - don't you mean 'blatently' and not 'patently'? Kettle..pot..black?

pat·ent·ly Audio Help (pāt'nt-lē, pāt'-) Pronunciation Key
adv. In a patent manner; openly, plainly, or clearly: a patently false statement.


Ie its you who is the pot :

 

[Fleeta]

pat·ent·ly Audio Help (pāt'nt-lē, pāt'-) Pronunciation Key
adv. In a patent manner; openly, plainly, or clearly: a patently false statement.


Ie its you who is the pot :

Good call mate, i've just learnt something new!

 

[theasxgorilla]

Do you want a home?

Or, an investment?

My advice...he (she??) should move to a country where its legal to negative gear your PPOR and where interest rates at the end of a tightening cycle are still only 5.85%. Who me, gloating?

Disclaimer: Sweden is a very dark, cold and miserable place during the winter time.

 

[pepperoni]

Disclaimer: Sweden is a very dark, cold and miserable place during the winter time.

And lets not forget that the more important "rate" is sweden is the suicide rate!

 

[theasxgorilla]

The Gorilla and I are going halves in a pad on the Mornington Peninsula, close enough to the beach to be able to wander down, buy some fish and chips, and watch the sun go down with a cold one....

Yep, but we're holding onto our 300ks for now right? Cos we have it on authority from the property bears that the new upper-middle will be giving their newly-renovated-at-great- expense holiday houses away soon.

PS. WTF Craigieburn??? Should check out the Mornington Peninsula. You can still get places in the 300's and the flow of wealth between Melbourne and the peninsula is likely to be much more stable than between Melb and Craigieburn.