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04-04-2018, 06:23 PM
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95 posts, read 174,484 times
Reputation: 28
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I'm 40 years old. No kids, never married. Don't ever plan on having kids. Marriage might be an option but I'm no where close it right now. Never been a home owner. I live in the Washington DC metro area. This area has a very high cost of living but I want to stay here for the rest of my career.
I'm thinking I should get a home in the near future (another 2-3 years of savings to have a decent down payment). Now, I know there is no way I'm going to be able to pay it off before I retire (let's say at 60 years old). But I don't plan on living in this area in retirement.
So, should I buy now/in the near future (even though I know I won't be able to pay it off when I plan on retiring) but then I'll sell it and move to a lower cost of living state?
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04-04-2018, 06:30 PM
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Location: Omaha, Nebraska
6,298 posts, read 3,479,933 times
Reputation: 14916
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If you plan to live in the area you're in now for at least another 5 years, buying is a reasonable thing to do. Deal with 20 years from now 20 years from now.
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04-05-2018, 10:32 AM
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6,107 posts, read 3,270,689 times
Reputation: 8335
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In that desirable area I would have no qualms buying even if you just planned to stay there 2-3 years. 25 years? No brainer pretty much anywhere. And would do it sooner rather than later as interest rates are rising.
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04-05-2018, 10:57 AM
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28,383 posts, read 67,936,355 times
Reputation: 18189
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This really boils down to the classic "rent vs buy" situation. If you are 40 years old and have never owned a home you can't do anything about the past 20 years or so of renting but statistically you still have at least 20 years or so ahead of you. Use the data from what you've seen in the past to enter reasonable numbers for rent and related costs, compare that to the realistic costs of home ownership. NYT has an extremely well thought out calculator -- https://www.nytimes.com/interactive/...alculator.html
It is also useful to understand that home ownership is highly correlated with what is generally considered "sound financial behavior" -- this is a set of behaviors that can lead to much better financial independence... https://seekingalpha.com/article/410...till-buy-house |
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04-05-2018, 05:05 PM
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9,270 posts, read 7,295,540 times
Reputation: 22756
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Buy now. In the DC area, the property should appreciate nicely over the 25 years to help with retirement.
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04-06-2018, 05:01 PM
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Location: Carver
77 posts, read 255,784 times
Reputation: 61
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The longer you plan to stay at the home you buy, the more financial "sense" your purchase will make in the end. If you only plan on being in the home for say 3 to 5 years, buying in smart is much more important. If you overpay going in, or buy with hopes of an areas value increasing etc... it may be unlikely you see any return on a sale in 5 years...possibly might see a small loss, and unless your doubling payments here and there you wouldn't have made much a dent in your mortgage in that time. There's nothing wrong with owning for a short period of time and breaking even when selling...it doesn't always need to be about making a killing on resale.
If you really think you are going to stay in your home for 10 to 20 years then buying now even in this seller's market is far less risky and smart alternative to renting. Be aware many first time buyers will want to buy another house in 5 or so years after becoming a homeowner because they now have had the experience, and know what you really want or need in a home that you are paying for as owner.
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04-06-2018, 08:37 PM
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Location: Wisconsin
272 posts, read 90,261 times
Reputation: 556
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If you can afford it now, BUY!! Two - three years from now, the houses can be out of your price range. I brought a house in NYC in 1998 and sold it in 2015 for 3x what I paid for it. Don't wait too long, markets change and prices rarely go down, especially in DC.
Good luck!!
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04-07-2018, 01:12 AM
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Location: New Orleans, LA
1,655 posts, read 2,978,670 times
Reputation: 2761
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It's hard to know at age 40, where you will want to live in retirement at age 60. So much could change between now and then.
If I were in your situation I'd go ahead and buy the condo, but only if you can afford it, and if you are pretty sure that in the next 5-7 years,
1. You won't have to move out of it, and
2. You won't want to move out of it.
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04-07-2018, 07:43 AM
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Location: Columbia SC
7,963 posts, read 6,716,042 times
Reputation: 10707
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Quote:
Originally Posted by Aredhel
If you plan to live in the area you're in now for at least another 5 years, buying is a reasonable thing to do. Deal with 20 years from now 20 years from now.
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Sound advice. |
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