Think again before investing in a triplex
Iíve been out of college for a few years, and I have no debt. Iíd like to start investing, so Iím thinking about buying a triplex, living in one of the apartments, and renting the other two. Should I get an interest-only loan for this?
Never, ever get an interest-only loan! If you canít make this idea happen on a 15-year, fixed-rate mortgage that takes no more than 25 per cent of your take-home pay, then you canít afford this project.
Think about this too. If you buy a complex and live on the property, youíll have to set down and enforce some strict renterís guidelines. Living with renters can be tricky, because theyíll have access to you 24 hours a day, and some of them will abuse the privilege. Then again, youíll have that kind of access to them as well. Not exactly a bad thing when you have people living in a complex you own.
Hereís an option. What if you just bought a nice, inexpensive single family home for yourself? You wouldnít have the cash flow, but you will have the appreciation and a better chance of reselling down the road. Plus, if you want to invest further, there are always mutual funds.
Real estate plans work out just like you want them to only about half the time. Donít discount the risk and expense either.
I have to make a four-day business trip to Hawaii soon, and my wife would like to go along. Itís okay with my boss, as long as we pay her way, and I would love to have her along. It will cost about $1,500 for her to join me, and I make a little over $100,000 a year. Weíre also debt-free, except for our home, and weíre working hard to pay that off as soon as possible. What do you think?
If I were in your situation, and I told my wife I didnít think it was a good idea or we couldnít afford it, thereís a good chance Iíd be sleeping on the couch for a month. Take your lady with you.
You guys have a six-figure income, and youíve got no debt but your home. So, a four-day trip to Hawaii for $1,500? Yeah, Iím definitely doing that. It sounds to me like you two have done a great job with your money. That being the case, you deserve a little fun ó like a trip for two to Hawaii for $1,500. Even if you have to work, youíll still have lots of time together, and sheíll be able to relax on the beach, swim and sightsee while youíre taking care of business.
Have a great time, you two.
Dave Ramsey is Americaís trusted voice on money and business, and CEO of Ramsey Solutions. He has authored seven bestselling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 12 million listeners each week on 575 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.