What route to take?

Question

Hello BP Community!

Over the last couple of months I have made a post here and there about various questions that I had. Each time, I have had responses that helped me see things from a different point of view. So here I am again, seeking advice. My girlfriend and I have been planning on buying our first property in Dallas Texas were we currently are living. We are originally from the Orlando Florida area and would like to move back there in the next few years. The other day we had a discussion and were thinking not buy a property this year and just continue to save until we move back so that we have a bigger down payment. Is this something worth considering, or should we get started sooner rather than later?

Lynnette E. · Answer

Stocks are not good for short term investments because the stock market can crash and you do not want to pull the money out when it is crashing and it can take a while to recover.

For short term safe investments try rolling cds.  Put your money in maybe 4 cds with one coming due every quarter.  When they come due, you can roll over if you do not need it, and you can start new one whenever you get extra money.  If you put your money into cds now at say 2 years, 15 months, 18 months and 21 months, you are set  As the 15 month cd comes due you can decide if you want to roll it into a new year cd, or 9 months cd so it ends when your original 2 year cd will end.  You keep deciding with each cd that comes due and eventually you can have them all come due at once and spend the $.  I get my cds through the stock broker, but he has gotten me 2 year cds at 3%.  Most are at 2%, all better than normal banks.

Matt Leber · Answer

@Tyler Lay I would say just don’t do a thin deal with thin savings.  If you are saving at a high rate then who cares if you do a deal this year or next year. In the grand scheme, 1 year isn’t going to make much of a difference. If it’s your first property then its definitely an advantage for it to be local, although not a must.

Don’t put a timeline on it, just continue to save and look at and analyze listings everyday (in both markets). If you’re in Dallas, and the right deal comes along, you’ll know it and you’ll be ready to jump on it. If not, you’ll be extra ready and have a nice reserve once you get back to Orlando. Good luck, man!

Lucia Rushton · Answer

@Tyler Lay. A couple of things “would like to” move back to Florida - who is to say that will or will not happen.

Also many people buy their first home where they are and then when they move keep it as a rental. Just need to ensure that a rental income would cover the expenses to manage the property.

If you do decide to buy in DFW also run report on rentals in the area at that time to get a snap shot.

If you have any questions or would like assistance running any reports let me know, happy to help.

Kerry Baird · Answer

I have property in both states, and pay more in property tax in Texas, for an equivalent price house. Both areas have strong demographics.  But ensure you have strong savings...so wait for that.

Nicholas Covington · Answer

@Tyler Lay Greetings from Fort Worth!

Are you referring to purchasing a primary residence or an investment property? Now is a great time to really do either with way rates are, that is if you plan on financing your home.

I'm a Mortgage Broker for both TX and FL, you are welcome to reach out to me and we can talk numbers if you would like.

Cheers

James Galla · Answer

Generally, the sooner you start, the sooner your cash can compound and snowball. However, if you choose to hold off, consider that money in the bank is money wasted because it won't be pulling back a return for you. Perhaps for the time being check out a mutual fund or some other less-risky stock portfolio to park your money.