Save up for house or put everything into Investments

[shinn497]

DC -> CA?

Life Status: Single
Gross Salary: 78k paid semi monthly
Pre-Tax deductions: None for now(I will explain below why).
Other Ordinary Income: None
Investments (Securities and Real Estate): None
Post Tax income: 4.7k / month
Current Monthly Fixed expenses : Rent 700$ Food 300 Misc 100
Assets:
8$ in betterment
5.5$ in TSLA (I think)
2500$ being rolled over into Betterment
Liabilities: ~11k in debt -- 1.5k medical expenses, 7k student loans, 2k credit card, .5k mosquito debt (late bills and stuff)

I have a previous thread but I want to distill and re-ask my question.. Short answer is I'm on the Dave Ramsey plan at least until BS4. Since I am paying off debt really fast, it is becoming apparent that I am going to start investing soon.

Previously I was more certain I would move but I think I understand that that is not a thing to be certain about. This is the earning phase of my life and I want to keep my options as open as possible. I may even stay at my current company for a while longer (Although I really want a higher salary).

When I think about investing. The biggest choice that comes to mind is should I save for a house or should I save for retirement? Here is the thing.
My only reason to have a house is to make retirement easier. I did some research and thought that I could save like 100k, get a 15 year loan, get a 200 - 250k house, get roommates/airbnb and then BAM, financial independance. And this could take like 3 years or so.   But the more I learn about homeownership, the more BS it seems. I am beginning to think it only makes sense if I really want to stay in an area for a long time, and i don't know that about anywhere right now.

By putting money in investments, I can keep my options open and retire early on more open terms. But I don't know. Does anyone have any thoughts on this?

[sokoloff]

My opinion: if you're not going to stay in an area (and ideally that house) for 7 years or more, it's probably not worth buying if your only goal is bringing retirement closer.

If you are going to move houses nearby and rent the old one, keeping the property as a leveraged bet on your local housing market, that's a fine way to move your retirement date. It moves it closer if the market goes up and moves it farther if the market goes down.

Selling before 7 years means a lot of transaction costs (both the overt ones that show up on an HUD-1 and the covert ones like moving, buying/selling stuff for the old/new place, painting, fixing little broken crap, etc.)

[ysette9]

I agree that buying a house is not the right thing to do unless you are settled and plan on staying for a long time. Check out The NY Times’ rent vs. buy calculator for the hard numbers : https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html

You can also model your situation in cFIREsim. When I did our own numbers I found that there was a definite delay in our FI date if we bought a house with cash or even put a bunch down versus putting only 20% down on a standard 30-year mortgage. Basically on average you are better off putting your money in the market to invest than paying off a low interest mortgage. Your specific situation is important to dig into though as real estate is very local.

[shinn497]

Ok then! I think I will just keep saving!  Yeah I mean I orginally wanted a house because maybe a garage would be nice. But I care waaay more about  building wealth. I guess that stuff will come in time.