200k to invest. Buying a rental property during medical school? I plan on going to medical school in the Houston, Texas area. I am wondering if I should rent and invest my money in stock market or buy rental properties? What is the best way to go?
I was thinking to earn money while I am going to school so the 4 years of medical school time is not wasted. How much time would I need to devote to my rental properties?
@Bryan Tasumi , I always recommend: invest in BARGAIN properties (rather than bother with shares). Having all cash should give you a great opportunity to buy at significant discounts from motivated/desperate Sellers, but, will still require you to be CAREFUL with your due diligence, because once it's spent, it's spent!
Why property instead of shares? #1: You maintain control over specific value-adding potential. #2: You ALWAYS have to pay full market value for shares. #3: You're MUCH more reliant on the whim of the economy with shares, vs. property.
#4: People always need to live SOMEWHERE (even you).
#5: It's much easier to BORROW to buy property, vs. shares (and STILL obtain positive cash flow). My 2c...
@Bryan Tasumi If you are moving to Tejas from CA then I would suggest investing in a place for you to reside whilst studying in Houston. This could be a "house-hack" or somewhere within the 200k budget. If you have time to buy a house with a little work, that would also work more in your favour! There are a number of areas around the medical centre that you could look at (not condo-land as the HOA's are incredibly high). Send me a PM if you want to talk more about it! But if you're single, studying and can buy a property you could also rent out to other students, it's a no-brainer to me.
@Bryan Tasumi If you don't mind living in a rougher neighborhood, move closer to the U of H area (3rd ward). This area has been turning. You can still get a small multifamily in that ballpark, and can potentially live for free. It's a bit longer to get to the med ctr, but you won't be living in the popular area for med students (around Herman park, which is right next to the med ctr, but also significantly more expensive, and definitely only rental).
200k is about the cost of your student loans you will incur...unless this is money you can afford to not have or lose or what not, dont mess around with it. the multi fam around the med school areas arent exactly luxurious areas... if you buy a place, get something leveraged and keep your money... example take 40k put 10% down on a 400k house around say braeswood, then put the rest in a 4 yr muni bond for it to collect tax free income while you are learning then pay your loan off or tuition off. student loan debt is highest weighted hit when trying to get a loan
if money is no object to you, get a house in west u and youll prob preserve your capital
Since you will be quite tied up during medical school, maybe a more passive investment may be a better course than something more active. Private placements can grow your funds rather than just preserving them.
Hey Bryan. Well as far as stocks vs. RE, here's my take on it-
As far as how much time you need to devote...that can range anywhere from 5 minutes per year to hundreds of hours per year. It completely depends on how you buy. You can buy nicer rent-ready properties that will attract higher quality tenants and have a good property manager managing the property (5 minutes per year time spend), or you can buy a total dumper that needs rehabbing and then you can landlord it yourself (up to hundreds of hours of time spend). And everything in between.
For the least amount of time spend and headache, buy a decently nice property that will attract high quality tenants and use a property manager. Or if it's nice enough, landlording shouldn't take up a ton of time either, but PMs don't cost much and they alleviate any 3am plumbing calls that might take away from what little sleep you may be getting during med school.
Have you gotten into medical school yet? If you have (which is kind of early unless you deferred from previous cycle), then congrats! There was another post recently asking the same question you're posing. I recommend searching for it. If you haven't gotten in, then I would wait to see where you get in before wasting your time searching around in Houston.