Need investing advice

[Jean Pierre Jabo]

Hi investors,

Im thinking about moving out of rural colorado in about 3-4 years, currently renting cheaply with my wife an apt (600/ a month). Theres a home thats available for us to buy, 4b 2b @175k. is it worth it to buy it if we will move in the city in about 3 years? or should we save money to buy a house in the big city?

[Josef Hardi]

Hi Jean,

How is the market in that rural area? If you check on redfin data center, you can get an idea of the appreciation / competitiveness of your area.

In general, listening to BP podcast, it's best to invest your money in real estate vs. saving it up to purchase RE at a later time. Conservative appreciation rate is about 2-3% (the past two years has been around 20-30% even on some markets), while conservative inflation rate is about 3% (currently we are at around 8%). In other words, if you keep money in the bank, it will continue to lose its value. 

My suggestion is this, if your local area has fairly high appreciation rate and you can cover the mortgage by renting your SFH (check rent price here: https://rentometer.com/), then perhaps you can consider purchasing and then renting the SFH. If you have access to biggerpocket rental calculator, you can run scenarios to see if the numbers work or not.

Another option would be for you to move into your SFH and then rent out the other rooms. Explore the two options and let the number tells you.

In three years, I think you'll be in a much better position with the equity you have in your SFH compared to the save-in-the-bank option.

All the best!