So we're doing our ESA at $2k/year for each kid. We have mentioned adding to that around $2k/year each kid into a 529.
Right now we are positioning ourselves to be financially independent soon enough not including college. DH will be 52 and I will be 50 when our youngest goes to college. I always had it as a goal that we would be Financially independent by 45 and I think it'll happen. But realistically I think we may have to wait until age 55 for DH to "retire" so that we could cash flow college.
But reading more about investing in real estate and I think in 2 years we could save enough to perhaps consider investing in it. I wonder if it would make sense to do a rental property for each child and use that instead of 529?
There are a lot of negatives including we're starting late, they won't be paid off and the cash flow might not work. Plus we'd need at least 2 homes for each child. But I wonder if this would make sense?
I can't do it for something that generates $100/month cash flow even with the depreciation tax break. I think that means we'll have to invest in something away and be an absentee landlord to make it happen.
Plus I need DH to get on board. I know he'll be anti-real estate. So anything I find has to make a lot of financial sense.
Any thoughts or experiences? Do you think this is a good idea? This is a long term play so I think with our financial situation we need at least 2 years of stability right now and planning. I need time to research to present my report to DH about where and how we will invest and who will manage the property for us. This is not something I feel we can jump into since we'll be needing to foot most of the cash down payment, emergency fund at first.
529 versus Real Estate
June 16th, 2017 at 05:31 pm
June 17th, 2017 at 02:18 am 1497665893
You have no experience at the rental business. If you buy the wrong property in the wrong location, get stung by bad tenants, and find yourself selling in a downturn because there is too little or no cash flow, you will lose some or all of your investment. How will you recover in time to write the tuition checks?
A diversified portfolio of stocks with some low-risk, uncorrelated bonds added in as you get close to needing the money, makes much more sense.
If you want to dabble in real estate, do so with your speculative investment money that you won't need until well into retirement. That way, if you lose money, you will have time to recover.
June 17th, 2017 at 07:17 pm 1497727023
June 18th, 2017 at 07:04 pm 1497812654