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Old 28.04.2020, 14:00
axman axman is offline
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

I would invest in property, but

1. please don't assume that this will be the only property that you would buy for the rest of your life. You would more likely end up buying 2-3 properties.
2. therefore start small as you can always upgrade later. So aim for what you can actually afford right now (around 600k property) and get that 1m one later.

I really struggled to buy my first one because culturally I was just brought up not to spend my money on rent. So I took a lot of risk i.e., I needed the combine income with my then-girlfriend (luckily now still my wife) to get the mortgage, and we used up almost every single cent of savings we had and still have to borrow almost 30% of the downpayment from my in-laws. The investment paid off for me, and very luckily we didn't need any huge expenditure for anything else. When the kids came we sold our original place for double the price and from then it was easy for us to upgrade. Now our annual interest payments is less than what the monthly rent for our place should be!

With our first property, we just made sure that if we had to rent it out, we would have a market for it, so yes location, but more importantly, public transport, assuming that a small flat will attract young professionals but not families who tend to have cars.

Later when you find a partner then your joint income will allow you to upgrade, not to mention you would have saved even more money from not having to pay rent! With a small investment now, your downside risk is not huge, but there is room for some decent upside if you choose well.

And congratulations, your savings sounds like it is enough for you to be jobless for about 4-5 years and still maintain your current lifestyle.
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