My spouse and I are selling our house in Ohio and moving to Orange County in the next few months thanks to job changes. We're 31 and 34. We don't really know the area, are a bit house "ownership exhausted" at the moment and housing seems overpriced in OC so we plan to rent for at least one year, if not longer. We will be selling our second house and expect to walk away with $100k-$120k depending on how the sale process goes when we list in the next week or two. The question is, what should we do with the $100k-120k given that we will be renting for several years and not need it for another down payment? I am a bit nervous that we'll miss some of the current house price appreciation, but on the other hand think if it is not currently a bubble in the SoCal area, it is at least very frothy.
Here is our current financial situation in addition to the expected house equity if/when we sell in the near future:
- Combined Income: $235k/yr before tax + variable annual bonus
- Current Savings Rate: Both max out 401k @ $18k/yr, and add an additional $20-30k/yr in taxable investing account
- Current Debt: $55k in student loan debt at 3.8%, paying $1550/mo.
- Housing: Current payment at $1850/mo., and expect an apartment to be roughly similar in OC
- Emergency Savings: $22k
- 401k/IRA/Taxable Retirement Accounts: $350k (60% individual stocks, the rest index funds, bond funds and cash)
Our current plans are to use half or so of the money to pay off the $55k in student loans even though it is only at 3.8%, which would make us 100% debt free! Then we plan to pay ourselves the $1550/mo. until we've paid back the $55k. But, what should we do with remaining $45k-65k and the subsequent $1550/mo.? Given that I'm nervous we'll "miss" some house price appreciation by not owning, I'm considering investing some of the money in different commercial or residential REITs or other real estate ETFs/mutual funds, but don't have many ideas outside of that. I'm comfortable with our current exposure to equities as we are about 70-80% in equities in our retirement accounts, but open to anything.
Any thoughts or new ideas are much appreciated, and I will be regularly checking for any additional questions or information!
Submitted May 29, 2017 at 11:41AM by SparkelNips http://ift.tt/2rcXJoi
