Background: We've been together almost 2 years, been living together for about 6 months in a 1BR apartment (used to be my apartment, she moved in from a different city after getting a job here). I am getting a house built (the house is in my name) and we will both move there once it's completed in about 2 months. We both have professional jobs. I make about $100k and she makes about $75k after all the bonuses. Right now we are splitting the rent and most expenses (I contribute a bit more on some things, like eating out, storage space for her stuff, etc.) The plan is that once we move into the house, she'll contribute $600 to the mortgage and we'll split the rest of the living expenses. Additionally, I have about $95k saved up in an index fund, about $30-$50k of that will be used for closing costs, down payment for the house, getting appliances & furniture, moving expenses, etc. She also has about $20k in savings. Also, the lease on my car will be up soon and I'll need to get a new one, while her car is already paid off. We currently live in Austin, TX.
We've had a few issues here and there, but usually manage to work it out after some discussions. However, one issue that kept coming up is that she really wants to invest money in a rental property. She feels that she doesn't have enough savings and that we're both dependent on our salaries. One of the argument she used is that if we were to both get laid off, we don't have any other income to rely on.
I personally don't have anything against real estate investment, given that it's the right time and it makes sense financially. However, I feel that with our current situation of me about to get a mortgage on a house, it doesn't make sense for us to take our another one at the same time for the rental. I think it makes more sense for us to wait until our finances stabilize a bit before thinking about making a major investment decision. I also feel that we need to have liquid emergency fund specifically for cases when things go wrong, like the situation mentioned above, or even when we want to a big purchase or spending for whatever reason.
Her argument is that the housing prices will keep going up and that we'll "miss a good opportunity" to get a good rental property. This is partly true, as the Austin housing market is absolutely crazy right now. But I still think that it's more important to be financially stable than to jump into an investment. I'm especially concerned with the risks associated with rental properties (eg. not being able to find tenants, repair costs, etc.) She's been obsessively looking at rental properties for the past few months and insist that we make this happen.
One issue that came up is how this investment property will be structured. If it will solely be in her name, she doesn't really have enough savings to cover the down payment and still have a good safety net. My take on this is that we should plan for the worst case scenario (ie. our relationship doesn't work out and she ends up having to deal with this on her own). Predictably, she always get emotional and doesn't want to consider the possibility. Another possibility is that we go in 50/50, but in that case we've got other issue that could arise.
My issue with this whole thing is that I feel like we don't really have "money problem." Our combined income, especially at this point in our lives, allow us to pretty much do most things we want to do within reasons. We take multiple trips a year, and eat out whenever we want. To me, investing in real estate is something that we should do when we feel secure with our finances (ie. after I've already taken care of the mortgage on my new house, buy all the furniture, get a new car, etc.) However, she doesn't seem to want to wait.
I would like some advice on how we should deal with this situation. Anyone has similar experience in the past?
Submitted March 20, 2017 at 12:22PM by investment_issues http://ift.tt/2nKDUm8
