5-6 year investing plan to purchase a house

[Mustachafello]

Hi,

I'm currently looking to save roughly 300K in 5 to 6 years to purchase a house cash, and I was wondering what would be the safest investing route outside of my ING savings account to get a higher but predictable yield since I will need access to the money? Thanks mustachians.

[cko]

Wow if you can save 50k a year perhaps you should look into investing in rental properties and forgo the home-purchasing until years down the road... If you say "safe" and "liquid" investments I can't see that yielding anything more than a few percent. If you get a mediocre rental property you might average 10% yearly and save money on income taxes and build equity... and if appreciation starts happening again in like ten years... well that return is going to be like 25% yearly.

[Mustachafello]

Unfortunately I am going through a short sale right now (long story) from a purchase before the crash, so my credit is going to be fairly screwed for a few years. I agree with you regarding rental properties, but my goal is to purchase a house cash, then move on to rental properties. I am self-employed, so FI for me is to have my expenses as low as possible.

[arebelspy]

Unfortunately I am going through a short sale right now (long story) from a purchase before the crash, so my credit is going to be fairly screwed for a few years. I agree with you regarding rental properties, but my goal is to purchase a house cash, then move on to rental properties. I am self-employed, so FI for me is to have my expenses as low as possible.

In real estate investing cash >> credit.  Even if not purchasing outright in cash.

As far as the original question, I'm of the opinion that you should invest the money and risk some downturn.  Over that time frame, you'll come out ahead like 80% of the time, and since it's a flexible target (i.e. you could push the purchase back 6 months or a year if the market was low) it's worth taking on the risk for the likely gains.  But it'll be whatever helps you sleep at night.  If you are very risk adverse, putting it into CDs that only slightly lose you money after inflation is reasonable.

[Mustachafello]

I am in the mindset that as long as I keep living the way I am now, I will hit the target simply by saving, so I'm a little more adverse to risk. I'm open to any suggestions you have investment-wise and consider other options.