[USER]

Back story- we sold our home to move where we are and intended to buy but can’t find anything and we love where we are renting.

However, the rent is high and eating into our $500k so we thought that we could invest it in the meantime and use the 7% return to pay our rent until we move again in 3-5 years.

Advice and recommendations appreciated. We would prefer not to do real estate investment as we don’t have enough know-how and it hasn’t turned out well for us so far.

[Bill]

No. Nothing like that exists. The going rate for a safe investment is about 5%. That’s not going to be locked in for 5 years though.

[Ron]

Never, ever for any reason should you put money in the mkt that you will possibly need in 5-yrs. Mkt history tells us that there is only an 87% chance of breaking even on any rolling-5-yr period.

So stay with bonds, money mkts, HYSA, or CDs.

Why not buy now at mortgage rates of 6% and then refinance in a year or two at 3% or so. I am concerned that housing costs, which have dropped or stagnated across the US, will be higher, perhaps much higher, 5-yrs from now. If you are counting on housing falling back to “normal” prices, you have be old and in your grave before that happens.

Rates are high now because of fed rate increase impacts on banks. Models indicate we will slip into recession by the end of the year. We have already have more layoffs YTD this year than any year in our history except 2020. By next Spring, if the fed thinks we have conquered inflation, they will start cutting rates. Mortgages rates will likely drop, too.

[John]

Honestly I would just put it into HYSA getting around 5% and be in a position to buy a bargain if it happened. Invest in any stock and you could lose capital. Cash is king right now with lots of mortgages not going thru.

7% won’t happen without some risk of losing capital.

[Author]

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