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View Poll Results: If retired/retiring on a shoestring, do you own or rent?
Own home free and clear no mortgage 42 51.22%
Own home with a mortgage 20 24.39%
Pay rent to a landlord 20 24.39%
Live with adult child(ren) or other family member(s) 0 0%
Voters: 82. You may not vote on this poll

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Old 11-25-2011, 02:36 AM
 
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Default For those retiring (-ed) on a shoestring, do you own or rent?

I imagine it is MUCH easier to live on a shoestring if you own your home than if you rent.
I'd like other people's opinions on this...if you own your home, do you think you could get by if you didn't own your home...what would you have to change to get by and make ends meet?
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Old 11-25-2011, 03:50 AM
 
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I think it is easy to retire without owning one's own home. I rent an apartment and retired two years ago at age 62.

I also live on a shoestring in retirement and it is not all that difficult.

freemkt, are you saying it is easier to live on a shoestring if just your home/mortgage is paid for in full or if you are still paying on a mortgage?

I think the expenses that come with owning a home can be outlandish and a big burden, especially if one is still paying the mortgage. But even if your mortgage is paid off, the expenses can still be a burden.
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Old 11-25-2011, 05:37 AM
 
Location: Bangor Maine
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What we have to pay in heat, utilities and taxes is still way less than we would have to pay for an acceptable rental. Anything decent in this area is $900 or more a month.
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Old 11-25-2011, 05:57 AM
 
Location: in a nut house
891 posts, read 780,961 times
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I have a mortgage. Thankfully it is about half of what rents are around here. Yes, I have things that need to be fixed. The roof is top priority, lotsa leaks. That, thanks to getting shafted last year by a roofer. (Being investigated now). I just take one day at a time and thank God that I have a roof over my head. A lot of folks aren't this blessed.
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Old 11-25-2011, 06:14 AM
 
Location: New England
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What you ask has a lot to do with location. Transportation cost is closely linked to housing. If you live in a rural area and own or rent, you must add your auto costs in; if you own your own or rent close in to town, you are much better off.

A rental in-town with a rent higher than the total cost to own in the suburbs or rural is, imo, more cost effective. What you pay more in rent is more than made up for by the cost of rising taxes, house insurance, maintenance, and transportation.

The only reason to own is if you must have privacy and control, and/or if you think that the repairs and upgrades you put into an owned home are going to give you a financial return.

The only problem with rents is that they're not fixed; they go up over time and sometimes dramatically depending on what the landlord wants to charge.

Perhaps the best is to own the smallest house you can find, and have a paid off mortgage....and someone in the family willing to do some repairs.

From a financial standpoint, at my age 63 I would rather rent. But there are other issues, mainly that I can't stand a lot of noise. But that's another topic.
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Old 11-25-2011, 06:45 AM
 
Location: The Triad (nc)
17,195 posts, read 21,839,868 times
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Quote:
Originally Posted by freemkt View Post
I imagine it is MUCH easier to live on a shoestring if you own your home than if you rent.
Even with the taxes and insurance and upkeep expenses...
in nearly every instance owning will cost less than renting a COMPARABLE home.

Quote:
if you own your home, do you think you could get by if you didn't own your home...
Sure. Most could.
But most also have far better uses for that other $500-$1000 a month.
---

The whole point of taking on a 30year mortgage at age 30...
is to NOT have to pay rent at age 60 (let alone 80 or 90).

That second 30 years can also be spent at some other address you later own.
hth

Last edited by MrRational; 11-25-2011 at 07:33 AM..
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Old 11-25-2011, 07:02 AM
 
29,279 posts, read 25,398,627 times
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the problem is with most of america moving every 5 to 7 years all your doing is paying the bank interest instead of the landlord rent. without heavy appreciation very little ever gets payed off until almost retirement age or beyond when folks tend to stop moving so much. you may take that 30 year mortgage at 30 but odds are you wont make a dent in it before moving. .
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Old 11-25-2011, 09:42 AM
 
Location: Los Angeles area
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Default Renting versus owning

The debate about renting versus owning has many facets. I just want to focus on one here - control. Suppose you live in a rental that really suits you - good location, everything is right - and then the owner dies and his only child inherits and decides he wants to live there. You can be evicted without having done anything wrong. You can pay the rent on time, keep the place neat, not bother anyone else, and still be evicted - no proximate cause is necessary other than the wish of the landlord.

One example is my own. For 11 years I had been living in an appartment in a five-unit complex. The rent was under-market and I knew it, so I was happy to stay there. Then the owner decided to sell. He accepted an offer from a buyer who had as a condition of the offer that my unit be vacated before the closing of escrow because he wanted to live there. Not just any of the five units - the buyer wanted to live in my unit because it was furthest back from the street. I didn't want to move, but accepted that I would have to. I tried to get things going expeditiously and was offered incentives to do so because I was holding up the escrow closing. But it takes time to find another place to live and pack up to move, especially as I was not yet retired and was working a full-time job.

Long story short, I did buy a townhouse and get moved, after holding up the escrow closing for some time, although that was not my goal - I was actually giving it my best shot under the circumstances.

This turned out to be one of the best things that happened to me, but that is not the point. It didn't have to turn out to be a good thing; it was the timing that turned out lucky because I bought the townhouse in late 2001, just at the beginning of the price appreciation frenzy in Los Angeles. If the same thing had happened in 2006, things would have been much more unsettled, and I can only hope I would have had the good sense not to buy at those wildly inflated prices. The point is you can be forced out of your rental at any time, whether the timing is good for you or horrible for you.
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Old 11-25-2011, 09:57 AM
 
Location: SoCal
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We already own our condo, and the association pays the water bill. So our monthly housing costs are only gas/electric and HOA dues.

An upside/downside of this is that it's a second-story condo. Eventually, those stairs will become a hindrance. But until then, they'll be good practice.

A downside of this is that our local public transport truly s&cks. Even the city call-a-van is reputed to be very unreliable. We'll have to find some way to deal with that when we're too old to drive ourselves (assuming we'll still be living at that point).
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Old 11-25-2011, 11:13 AM
 
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Quote:
Originally Posted by susanra View Post
I think it is easy to retire without owning one's own home. I rent an apartment and retired two years ago at age 62.

I also live on a shoestring in retirement and it is not all that difficult.

freemkt, are you saying it is easier to live on a shoestring if just your home/mortgage is paid for in full or if you are still paying on a mortgage?

I think the expenses that come with owning a home can be outlandish and a big burden, especially if one is still paying the mortgage. But even if your mortgage is paid off, the expenses can still be a burden.

Silly me, I had this notion that it would generally be easier to retire with a free and clear house because I'm used to paying 40+ percent of my income on rent, and the difference between having no rent or mortgage to pay (and perhaps no property tax, since some states offer deferrals to struggling seniors, where the property taxes are paid after the homeowner dies, moves, or sells) seems huge to me - that 40% for rent would represent the difference for me between being able and not able to retire. (Also, when you're retired and own your home, renting out rooms for extra income is usually an option; I've known a number of people who have done this or have rented from such homeowners.)
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