HELP! Buy a home or invest

[audreycg]

Hi there, I am completely new to this forum, so nice to meet everyone. I am desperately looking for advice. I am a 50yo mother to 2 adult children, both of whom live with me. My son is 24 and working and going to school. My 20yo daughter was born with medical and developmental disabilities, and is currently taking classes on a sporadic basis and not really working (walks a neighbors dog daily for 50.00/wk). Bc of these disabilities she may not ever be able to really work or even live on her own. Its not definite, but likely. We are in the process of trying to get disability for her, but that is probably pretty far down the road, if ever. Meanwhile, I work and earn approximately 5500.00/mth gross(translates to about 3800/mth, after taxes and 401k contribution). My son contributes 500.00/mth. I have about 12K in a 401k plan, and approximately 212K in an investment account. I pay 2000.00/mth in rent, and have no other bills really, other than utilities and groceries every month. No car payment or debt. My question is should I buy a property or keep the money invested. I live in Los Angeles - crazy expensive. I actually have a good deal with the rent - believe it or not. Its a 2br/2bth in a very nice area of west la/santa monica, and i have looked and looked and cannot find a better deal, especially considering i am about 15 minutes with traffic away from work I do not have this burning desire to own a house, although of course i would love it, especially the yard. What I want is to make sure that I maximize how much I leave for my children, particularly considering my daughters situation. In the long run, is my money going to grow and provide better for my children if i keep it invested or if i buy a house in los angeles. just to make it even more complicated, I am not even sure that I want to stay in los angeles thru to retirement. I am originally from the east coast and would some day love to return, but not until my son finishes school and is ready to move.
I know this is a lot but I cannot seem to get a straight answer - real estate agents tell me buy, investors tell me invest. Thanks in advance for your help

[sv2007]

If I were in your situation given what you've written and what I assume, I'd definitely NOT buy a home right now.

[james.hendrickson]

Hey Audrey,

Why not do both? With 212,000 in an investment account you should pretty easily be able to put 20% down on a good quality home. That would leave you with a big chunk of change to leave vested in the stock market.

[sv2007]

Hey Audrey,

Why not do both? With 212,000 in an investment account you should pretty easily be able to put 20% down on a good quality home. That would leave you with a big chunk of change to leave vested in the stock market.

She's in Santa Monica, where median house value is about $1m; and prop tax is $10k/yr and $1k/yr insurance. I doubt she'll have much $ left over.

[Outdoorsygal]

I would keep it invested. Then as it grows, you might know where you really want to live permanently. I'd be guiding my son to a job which he can transfer in case you ever want to move to a lower COLA area.

[dczech09]

I would invest. Do you have an IRA? I would look at opening a Roth IRA if you do not already have one. At the age of 50, you still have some time to invest so you can afford to take on a little risk.

I would absolutely not touch any of the money that is currently invested - let that grow without penalty.

I would absolutely not look at home ownership. You do not even have a strong desire to do so, and home prices in LA are crazy! So why do it? I would invest, keep with the same rent which you have been paying, and I would work with the son so that he can gradually be weaned out of the house. This is a great investment in itself for the both of you!

He needs to learn how to provide for himself. This way, you can focus on supporting your daughter so that he will not need to in the future.

[scfr]

Of course RE agents tell you to buy! Ignore them.

Given the great deal you have on rent and the desire to possibly move back to the East Coast in a few years, if I were in your shoes I would most definitely NOT buy a house right now. And if you really want to move back to the East Coast, I'd say the sooner the better (as soon as you can find employment). I don't know what field you work in or how easy it is to find a job in your field as an "AARP-eligible senior" but it does get harder and harder to land a job as the number of candles on the birthday cake increases. (I'm not saying this as an insult. I'm older than you.)

[james.hendrickson]

She's in Santa Monica, where median house value is about $1m; and prop tax is $10k/yr and $1k/yr insurance. I doubt she'll have much $ left over.

Ouch - zillow puts the median home value in Santa Monica at 1.3 million - yeah you would need way more than 212K for a decent downpayment in that market.