Author Topic: What to do with an extra $2000 a month  (Read 4381 times)

crucialink

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What to do with an extra $2000 a month
« on: August 21, 2014, 07:26:14 PM »
My question is I am paying off my mortgage in a couple months, which will free up $2,000 a month. I am not sure if I should take that $2000 (get a mortgage for 180,000) and buy a condo and rent it out in Florida, put the $2000 into a vanguard REIT or just put it into my vanguard VTSAX. Any suggestions?
« Last Edit: August 21, 2014, 08:06:36 PM by crucialink »

neo von retorch

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Re: What to do with an extra $2000 a month
« Reply #1 on: August 22, 2014, 06:57:27 AM »
You may have already thought of this / included it in your calculations, but is it "actually" $2000, i.e. the P&I payment was $2000, and you have your tax/insurance costs separated?

tomsang

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Re: What to do with an extra $2000 a month
« Reply #2 on: August 22, 2014, 07:58:52 AM »
We need more information on your entire balance sheet, the details of the rental, etc.  Plans for retirement, need for liquidity before tapping old man money, overall plan.

Sounds like fun

usmarine1975

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Re: What to do with an extra $2000 a month
« Reply #3 on: August 22, 2014, 08:52:43 AM »
If you have paid off your own home, I would be less likely to secure a new loan with it.  Getting a mortgage on the Condo would be the way I would go.  Not that you would lose it but why risk your personal residence for a business venture.  I have a friend that built his home with no debt.  He then decided to buy a business with a partner using his home to secure the loan.  The business went belly up and he is now stuck with a mortgage on his own home that he built without debt.  That payment has got to suck for him.

frugaliknowit

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Re: What to do with an extra $2000 a month
« Reply #4 on: August 22, 2014, 04:10:46 PM »
Mortgaging a condo (especially far from where you live) and renting it out sounds like a potential train wreck.

We need more information about your balance sheet, career, risk tolerance, and aspirations.

Thegoblinchief

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Re: What to do with an extra $2000 a month
« Reply #5 on: August 23, 2014, 05:55:05 AM »
1. Are you maxing your 401(k) or other pretax retirement accounts? If no, do this.

2. Do you have a HDHP? If so, shovel the max into the lowest fee HSA you can find.

3. Are you eligible for a Roth? If so, shovel the max.

Still money left over? THEN you can consider real estate versus taxable investing. The tax advantages of the accounts above radically increase their compounding power.

dividendman

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Re: What to do with an extra $2000 a month
« Reply #6 on: August 24, 2014, 12:39:12 AM »
Have you considered booze and hookers?

If that's out of the question... do you like your job? Now might be a good time to look around for part time or lower paying (or higher paying!) work you might like.