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Old 04-03-2015, 04:15 PM
8,803 posts, read 5,478,896 times
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Originally Posted by WellShoneMoon View Post
I own (no mortgage) a 14-year-old home in a decent but far from posh neighborhood, worth about $200K. ...

Maintenance costs, insurance, and property taxes for my home total about $650 per month, ..., the house is 1900 square feet, way too much for me as a single person. ... BUT rent would cost me at least $1K a month...
This situation somewhat resembles mine, save for the prevailing rents being much cheaper. Having lived in a house for a long time, inertia and personal pride are what preclude my "downgrading" to a rental apartment. Financial reasons overwhelmingly favor renting.

Originally Posted by Giesela View Post
Its only an investment in certain areas. Much of the "rust belt" a house is not.
As a matter of fact, were I to stay in Dayton I would only buy a house here if I planned on living in it forever.
Dayton... yes, the place is laden with a few particular burdens. Most astonishing is the high property taxes (as percentage of house value) and the dogged stagnation of real-estate prices since basically the late 1990s. And yet nearly anyone who's anyone (locally) will scoff at any option besides house-ownership. Culture?
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Old 04-03-2015, 07:16 PM
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Very small houses - under 800 sq feet - are very affordable in many different locations. These tend to be smaller than most apartments.

Sure there is upkeep and maintenance - but you are paying for that when you rent as well. And rents have gone up every year in every place I've ever lived.

I would suggest a condo or townhome - but it is increasingly the case that these have HOAs which tend to become expensive over time. I've seen HOA fees that were higher than mortgage fees. And you never know when you will get hit with a repair assessment for something out of your control, like roofing or siding. And you don't have time to deal with those - the HOA wants their money in as little as 30 days to effect such repairs.

So I don't suggest anything that involves a HOA.

Thus, back to the small house. You can get this with tiny yards as well. I see a lot of them when I'm perusing the real estate ads looking for a house.

You may live another 20 or 30 years. Think about what rents were like 30 years ago, and ask yourself if you will still be able to afford rent when - not if, but WHEN - it goes up in the future.

Save the money you're not spending on rent for maintenance costs in the future. It just doesn't make sense for anyone NOT to buy rather than to rent in the long term. Rent is easily two to three times what a mortgage on the same property would cost you.
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Old 04-03-2015, 08:50 PM
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Renting vs. Buying: The True Cost of Home Ownership - Can I Retire Yet?
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Old 04-03-2015, 09:01 PM
Location: NC Piedmont
4,015 posts, read 3,031,567 times
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I plan to own a reasonably priced small home outright in a state where they don't foreclose on residences for debts other than mortgages to ensure I could survive a financial meltdown from a health problem or some unforeseen liability.
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Old 04-03-2015, 09:55 PM
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Rent is lifetime debt and with the tightening rents are going up and up. I have no doubt treasuries goal to get back to 65 historic ownership is going to happen.
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Old 04-03-2015, 10:03 PM
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Originally Posted by PAhippo View Post
I would say rent until you're sure where you want to live. Then buy.
Definitely test the area first! You might try an active 55+ community where you can make friends with other retired people.
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Old 04-04-2015, 11:32 AM
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Yeah. His reasoning is totally erroneous.

Rents go up every year.

Mortgage payments - as long as you are smart and get a fixed rate mortgage - do not.

If you are renting, you are paying for the mortgage, taxes, insurance, maintenance, and the owners profit. This will NEVER add up to less than you would pay if you bought the house outright, especially as time passes and rents increase.

The house we live in currently rents for $1450. It is likely to go up this year as rents have gone up all over the city. Were we to purchase this house, our mortgage payment would be $738 per month. Insurance and taxes, an additional, say $250 - on the high end, assuming max for taxes and insurance costs. That's $1013 per month. That leaves over $400 a month to put back for maintenance.

Renting makes sense only in the short term. It is ALWAYS a losing proposition. Its true that owning - even after you've paid off the mortgage - isn't free. I don't think anybody said it was. But it is for darn sure less than paying rent for years on end.

Renting is a short-term solution for us as I look for a place to move to now that my health is as recovered as it is ever likely to be, and as my son considers his long-term career goals.
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Old 04-04-2015, 12:11 PM
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Originally Posted by MrRational View Post
That sounds expensive.

I think if a homeowner averaged it out, it is about right. I just finished a $39,600 reroofing, new HVAC, new small front porch project. Average that out over 20 years and then add in all the other home maintenance stuff, including the tools needed to perform those things. I don't even want to think about what it costs to just maintain my house and grounds. For anyone who hasn't owned, they need to consider what they will do when suddenly, they need a large amount of cash to repair something.
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Old 04-04-2015, 12:42 PM
Location: Tennessee
35,230 posts, read 34,522,115 times
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Originally Posted by Giesela View Post
So for retirement it is usually recommended to own your own, mortgage payed off by retirement.
In fact it seems most retirement advice operates on the assumptions of married, kids, house.
Currently live in an apt, looking to retire on small pension at 60 in 2 years.
Single. Have no family to speak of.
Will retire in a different location. Would love it if it were the last place but am not
absolutely sure.
Should I buy?
How else does my situation change the standard assumptions about retirement?
I am single and I rent. I have a sister in another state.

I rent because:

1. I don't want to take care of a house/yard/I can't physically take care of a house/yard. (I don't want to and now I can't even if I wanted to.) As a renter you know maintenance takes care of things that break and they also maintain things like your heater/air conditioner. Landscapers take care of the outside.
2. I don't want to pay for unexpected things that need repair.
3. I have no children to whom I need to will a house when I die and it would be a burden to my sister to have to sell a house because of medical things going on with her.
4. I don't want to have to sell a house in old age should I have to move.
5. I have a pension that typically increases enough to cover rent hikes where I live now.
6. My apartment is as big as any house I would buy (2b/2b) and I live in a cheap state.

Think of yourself at 70 and single when you make your decision. My reasons might not be the same as yours but whether you rent or buy, I would advise "no stairs" inside or out no matter how good you feel now.

For those responding, could you please mention whether you are single and taking care of a house? It makes a difference.

Last edited by LauraC; 04-04-2015 at 01:09 PM..
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Old 04-04-2015, 01:00 PM
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depending where you live owning a paid off home may account for very little when taxes and expenses are soaring.

here in long island a bunch of us bought homes in the 1970's in suffolk county for 30-35k. we had 30 years to pay off those homes with mortgages under 250 bucks.

today taxes are 12-18k a year and utility's are 400 a month. do you really think 250 a month matters in the big picture when it comes to affordabilitry ?
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