Now this is a tricky one because of all the problems in the real estate lately. However, if you have already fixed yourself up with a cheap place to live. It wouldn't be a bad idea to set aside savings to buy an investment property. People are always going to need a place to live. Rental property can serve their needs and your own. This market may not touch bottom for a long time. Save your money and buy your freedom. A nice two family house can be a great way to start. You can live in one part and rent the other side. Rental income can help with the mortgage and taxes.
Getting a foreclosure might be tricky, but the thing is don't to be afraid of doing a little work. I brought my first apartment at one third below market price because it needed a paint job and the floors sanded. It also needed a new sink in the bathroom. I knew a plumber so I wasn't to worried about the cost. I spent less than $2000 to bring it up to speed and saved more than $10,000. The rest of what I put in was sweat equity. I had to clean all the kitchen CABINETS AND A SINK THAT HAD NEARLY AN INCH OF CRUDE ON IT. IT TOOK ME A COUPLE OF DAYS BUT IN NO TIME EVERYTHING WAS SHINING AND SPARKLING. THEN I SPRAY PAINTED THE HANDLES AND THE KITCHEN LOOKED FRESH AND NEW. RECENTLY I BOUGHT A HOUSE WHICH NEEDED THE SAME KIND OF WORK. My handyman husband did most of it and now our house is gorgeous. In the kitchen, I sanded and my husband refinished the cabinets. We went to a discount retailer and bought some wonderful chrome handles. The real estate lady Linda couldn't believe the difference.
Now when I looked for a house or an apartment, I bought something cheep. I didn't get fooled into buying the best house in the best neighborhood. I brought a nice little house in a convenient location. I stayed within my budget. I wanted to pay less not more. I HAVE NOTHING TO PROVE TO THE WORLD. I AM WHO I AM. I WAS GLAD THAT I DID WHAT I DID BECAUSE JUST WEEKS AFTER MOVING IN, I HAD A STROKE AND COULDN'T GO BACK TO WORK. A BIG MORTGAGE WOULD HAVE MADE MY LIFE A LOT WORSE. ALWAYS REMEMBER THAT LIFE IS VERY RANDOM. It can side swipe you without notice. Be prepared for bad things to happen. Be in a place where you can face anything. Have savings. Keep overhead low and don't need things. Don't feel the need to have a brand new car and don't worry about what people think. Live for yourself and not for the capitalist economy. Now I love capitalism and the goods it produces, but it is subject to boom and bust cycles. God forbid you get caught in the downturn without the external economic resources and internal resilience to make the best of a bad moment. Those with a little extra money are out there buying houses. Renting them for income until the cycle returns to boom. Then they sell and wait for the bust to buy again. Stocks drop quickly, but houses can take ten years to touch bottom This is how people make real money.
Finally buy a house in a place that is nice and safe, but, for whatever reason, slightly undervalued. My mother did this with her first property. She sold it at the top of the market and then bought someplace that was cheaper and got a great bang for her buck. She rented the house for almost 20 years. It paid her back it's purchase price. And then she sold it for triple what she paid. This is very basic economics. Now she's buying more. Plans to rent and make more money. I am trying to save every nickel so I can to buy my own investment property and I plan to get a mortgage. If the pundits are right and inflation comes, a mortgage could end up making me money because if inflation outpaces a mortgage interest rate, it gets easier and easier to make a payment. That translates into early repayment or money in my pocket. Inflation can be good in certain markets.