Buy a house or start a business?

Hi, I'm 24 and work for government. I have no debt but no money saved either. Is it better to buy a house now or take risks and start a business?

I hear it is a buyer's market and the best time to buy a house. But if I buy a house it may be harder for me to save money for a business. What I really want is to be financially free and not to have to work my whole life, so starting a business and just renting for now sounds good too. Renting is kind of a waste too, just paying someone else's mortgage.

Start the Business.

Don't listen to these people. You will need FLEXIBILITY if you want to succeed as an entrepreneur. You don't want this huge illiquid asset sucking the cash out of your pocket. Renting out a house is a nightmare and only for suckers who are too scared of the stock market or don't understand it.

The purchase of your principal residence should NOT be principally an "economic" decision. It should be bought based on where you are at in your life not because it seems like a good time to buy. Besides NO ONE knows when the best time to buy is. Maybe its in 5 years when your business is a great success and you really have some decent cash to buy the house you really want.

The only way to get "financially free" is by starting that business, paying yourself first and working your *** off. If you want to slug it out as a landlord for 30 years dealing with reprobates to achieve the same thing than be my guest.

** I ammend my answer and agre with the guy below me. I didn't read carefully when you said you had no savings. He is correct that you are in a position where both endeavours woulds fail. Make some money first. Work your *** of until you have money. There is no free lunch in this world.

Can't you buy a house and make a home office in it? That's what I do. It's a bit nicer too because you can deduct the percentage of that room off your bills (i.e. if the house is 2000 square feet and the room is 200 square feet, you can write-off 10% of the utility bills off your taxes). It really depends on what kind of business you want to run.

I am no expert but it sounds like you should start your business first! it takes a lot of money to build a business so get settled with that first then you can get yourself a house.. you are still really young so go for it! i really want to start a business first! i am 23 years old so i will start with that too.. good luck

You can get the best of both worlds...Buy a duplex or better than rent part out...Of if you're still single than simply buy a house and offer out rooms for rent. The rent you collect will help you to defray the cost of the mtge and upkeep on the home and allow you more flexibility in terms of saving for that business you want to start. Of course you really can't do anything without sufficient funds for a down pmt on a house or startup capital for a business. BEST OF LUCK!

Do you know what kind of business and how much it will take to start it (adding an extra 50% to what you think it will cost because it always costs more than you think it will)? If not, buy the house. It is a buyer's market and you should be able to get a really good deal on a house. As long as you get a fixed rate mortgage, you know exactly what your housing costs will be for the next 15, 20, or 30 years. They will stay the same while rents will continue to go up. Renting is paying some else's mortgage but will you be able to save for the business while you are paying your own mortgage? Maybe not for the first year or two, but with your housing costs staying constant, it will be easier later on.

Having no debt is a great place to start.

Having some savings would be the next step, not buying a house or starting a business.

If you want to be financially free, learn to manage your money such that the income is more than the outgo. This is not only more important, but also a recommended prerequisite to buying a house or starting a business.

Starting a business with zero capital or buying a house with 100% financing expose your finances to unnecessary risk and also endanger the success of your business or the likelihood of running into trouble paying your mortgage. Among other things, it leaves you with no margin for error. That's why one of the prime causes for small business failing is that they are undercapitalized; and why 100% financed loans go bad more often than 90% ones.

Hi,

I do not believe that one or the other are mutually exclusive choices however let me give you a little about how I did it and what I think now regarding your questions.

I actually bought my first house when I was 24. I started my first business when I was 31. Owning a house has a lot of advantages prior to owning a business.

1. It is much easier to qualify for a house when you have a steady pay check.
2. Because you are buying your first home their are special finance programs for first time buyers. You could qualify for an FHA loan or other government sponsored loans depending on your income. You may need a co-signer depending on your credit (or lack thereof).

3. Once you have a home for a few years you develop equity in the home and can take a 2nd loan to assist with fixing up the house or financing a business.

4. Starting a business is a big financial strain unless you already have backers for your concept. 95% of all business fail in the first 2 years due to lack of planning.

5. Many of my friends ask me if they should start a business and I always say be careful what you wish for as it is not a picnic it takes perserverance, patience and money.

6. If you can start the business part-time at home while you work your other job, you will have income from you day job and once your business gets off the ground and starts making money then you can make a decision to move or not move out of your current job. You can always hire someone to work the hours you cannot work after it is making money.

7. No Matter what you have to figure out your budget. The reality is that most people do not live within their means. You can always get a bigger house later. Make sure you can afford the monthly payments, the taxes, the insurance, the maintenance, any association fees, furnishings, and of course home improvements. House's cost money to own and you are responsible.

8. This year is a great time to buy do to the inventory and the prices going down. However, due to the fact that a loan is hard to come by unless your credit is great, it is also hard to buy. The projections for the housing market is that it will remain a buyers market well into the 4th quarter and probably most of next year, so there is no hurry.

9. The first thing you need to do is SAVE MONEY. Either option is going to cost you money even with a loan you need a down payment and closing costs to deal with. I will tell you that the more cash you can put down the better. In the mean time make sure you have some credit cards that you pay off regularly to assist with building your credit score. In fact check your credit score at a site like freecreditreports.com so you know exactly what you are up against.

10. The final answer is there is no rush just make sure whatever you do it is a good financial decision for you now and what you can afford. With the current downturn in the economy you do not want to run out of money before you get into your new home or new business

Good Luck

Keith

If you are trying to achieve financial independence, then you need to save money. Having no debt is great! Now start building up your savings because you can use that capital to make more money through investments.

People often make the mistake of saying "renting is a waste." Sure it is an expense, but paying interest and fees on debt (or mortgage) is also a waste. True financial independence is not being tied down to debt, and having the capital to do whatever you choose.

Personally, I am saving up a huge amount of money to go travel the world and enjoy life... being able to quit the job, travel and live off my investments for the next few years is my idea of financial freedom.

Neither. You stated that you had no savings. The only way you could invest in a business or buy a house would thus be financing the entire amount. You should put down at least 20% a down payment for a house. For a new business I would invest mostly saved cash. If you are trying to make money on a business and part of your overhead is paying off a creditor, you are going to struggle. If you buy a house with no money down you will struggle. Rent for now and save, save, save. Get the house going first, unless you got this great business plan and some capital.

For startups and new businesses, I would recommend

http://www.angelbusinessloans.com