Author Topic: Want something safe to buy a home  (Read 723 times)

BFive55

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Want something safe to buy a home
« on: June 09, 2019, 09:48:31 AM »
I sold my home recently and received the money for the sale.  The next home I purchase I am going to try for a maximum purchase price of $260-270,000 (only if it requires no renovation... I renovated my last place and the $ and time could have been better spent working overtime and making some money with less stress, IMO).

I have $50,000 I'd like to put somewhere relatively safe. I use Vanguard and some of their CDs are offering 2.4%. While... good... I was wondering if tre would be anything else that is good and can offer a bit better return for the safety?

Finances_With_Purpose

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Re: Want something safe to buy a home
« Reply #1 on: June 09, 2019, 12:30:11 PM »
Return and safety are inversely correlated.  You could go into bonds of some type, but there's more risk.  Just how it is. 

reeshau

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Re: Want something safe to buy a home
« Reply #2 on: June 10, 2019, 05:32:31 AM »
You can get 2.6% on a 12-month CD from Ally, but fully agree:  with anything else, you will be taking a risk.  You didn't mention a specific time frame, but you said you sold your old house, so I assume you are looking to buy immediately?  If you had said you were 5 or 10 years out, you might get a different answer.

You may also be doing better than you think.  Given your price range, I assume you aren't looking for a coastal house.  While I'm in Ireland, I have a house-worth of CD's sitting back in the US.  We will be returning to the Houston suburbs, which Zillow reports are gaining at 1.x%.  So, I can reinforce my correct decision to not take risk with short-term money by also seeing the icing on the cake that I am actually beating local housing price inflation, too.

ender

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Re: Want something safe to buy a home
« Reply #3 on: June 10, 2019, 05:44:54 AM »
Return and safety are inversely correlated.  You could go into bonds of some type, but there's more risk.  Just how it is.

This.

What type of rate are you wanting?

What timeframe?

Financial.Velociraptor

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Re: Want something safe to buy a home
« Reply #4 on: June 10, 2019, 04:26:44 PM »
You can get 2.6% on a 12-month CD from Ally, but fully agree:  with anything else, you will be taking a risk.  You didn't mention a specific time frame, but you said you sold your old house, so I assume you are looking to buy immediately?  If you had said you were 5 or 10 years out, you might get a different answer.

You may also be doing better than you think.  Given your price range, I assume you aren't looking for a coastal house.  While I'm in Ireland, I have a house-worth of CD's sitting back in the US.  We will be returning to the Houston suburbs, which Zillow reports are gaining at 1.x%.  So, I can reinforce my correct decision to not take risk with short-term money by also seeing the icing on the cake that I am actually beating local housing price inflation, too.

My home in the (north) Houston suburbs is valued at 118,000 (4/2/2 - 1950 sqft).  There are pockets of great affordability in H-town.

talltexan

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Re: Want something safe to buy a home
« Reply #5 on: June 11, 2019, 09:15:05 AM »
The other thing you can do is put it into a taxable investment account, with 80% of it in something like $MUB (a bond fund, yield is about the same as those CD rates, but tax-free), and the other 20% in something like $VTI, allowing for some growth while only taking moderate risk. You're mostly protected from the downside, but not completely.

BFive55

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Re: Want something safe to buy a home
« Reply #6 on: June 11, 2019, 03:02:56 PM »
My time frame is around 12 to 20 months.  I'm in a relatively Higher COLA where if I want something decent I gotta spend $250,000+ (or get a condo but then the condo fees are more expensive than a townhome...).

I'm renting right now. I sold my home to take a new job and just want to know the area before jumping into anything. Though I kinda like renting since I don't have to do a thing to fix shit, which is nice.

reeshau

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Re: Want something safe to buy a home
« Reply #7 on: June 11, 2019, 04:12:18 PM »
12 to 20 months?  Yeah, don't put any risk on that.

12 to 20 months, heading into the Presidential election cycle, Brexit, and an active trade war with China?  Yeah:  no, no, no risk.