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Old 09-21-2018, 11:16 AM
 
630 posts, read 873,319 times
Reputation: 1266

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My mom is selling her house (not by choice) that she lives in and inherited from her parents, and she is splitting the proceeds with her brother. Her half of the proceeds will be around $110,000, and I've gotten her preapproved for a $50,000 FHA mortgage. Which means she could purchase a condo for about $150,000 or less. She's looking in less expensive but still safe areas of North Dallas and East Dallas. Now I am trying to determine if she should buy a 1 BR condo or if she should rent an apartment. She receives a modest income from social security and has less than $30,000 in her 401k (no pension). She does some side jobs that provide her a little extra income, but nothing substantial.

The pros of renting are: more predictable costs, maintenance is covered, she'll have more liquid cash from the sale of her house for other expenses (this could also be a con if she spends frivolously), and finding a rental before the end of the year will be much easier than finding a home. The biggest downside is that she will eventually run out of money before she dies if she lives another 25 years. At this point, I would be interested in getting her into a complex that takes housing vouchers or into a low income senior complex. Public housing for people of all ages would not be an option due to safety concerns. My main question is whether the housing voucher/low income senior apartments are "decent" and actually available, or if they are mostly unsafe and/or very difficult to actually get into because of long waits. I sense private landlords also don't love taking housing vouchers (and I know some of you on this board are landlords, so I'd appreciate your input); I wonder how much difference it would make if I guaranteed the payment of the private-pay portion of the rent, and if the landlord were able to meet with my mom and she could pass the "eyeball test" to alleviate any concerns that she's going to trash the place.

The pros of buying are: Forced savings (I don't say this as someone worried about inheritance, just that her money last as long as possible for her), probably a better investment if she stays there for 20 years (although she isn't great with home maintenance), more stability in terms of not potentially having to move as often, and maybe a better play when it comes to means tested public benefits (although I'm not sure this really applies with her being on social security. I haven't fully explored what else she could qualify for and what the asset based means tests are). It may be a moot point if all the condos in her $150,000 price range are too unappealing to her or if that price proves to be too difficult for us to actually grab anything before she has to get out of her current house.

I'm very involved with helping her manage her finances, and basically her guarantor if she completely runs out of money. If/when she completely runs out, I will just help her out financially with paying for her living expenses, but taking her in to live with me is not something I'm considering (except for in a short term emergency type circumstance) given that I do have the means to avoid it, and do need to avoid it if I can. I just want to explore what options are out there to make her money last as long as possible.

Please no political posts about whether or not you agree with government subsidies. I work and pay a pretty good amount of taxes, so I have no qualms with my mom potentially getting some benefit from some of these programs. And I appreciate any helpful insight any of you may have to offer!
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Old 09-21-2018, 12:41 PM
 
216 posts, read 341,254 times
Reputation: 386
I have nothing to offer but am interested in the answers as we are dealing with a similar situation.
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Old 09-21-2018, 12:54 PM
 
Location: Frisco, TX
1,399 posts, read 2,152,421 times
Reputation: 1977
I have no personal experience with these, but there are some income based senior living complexes in DFW:
https://www.retirement.org/location/...ng/silverstone
https://www.retirement.org/location/...gnolia-heights
https://www.retirement.org/location/...iew-retirement

I wouldn't suggest buying a house. My grandmother is 97 and lived in her small home in Plano until she was 94 or 95. She ended up outsourcing (obviously) all of the maintenance that a house requires the last few years she was there and it was pricey. Even though the house was small by Plano standards (under 2000 sq ft I think) it was still too much house for a single, elderly woman (insurance premiums, heating/AC costs, etc.) It was also a huge headache for my mom to deal with any issues that came up, like repairs. The house was hit by a hail storm and it required a new roof and a few other things. My mom had to talk with the insurance company, meet adjusters, roofers, etc. and it took up a lot of her time. It was also a lot of work to downsize my grandmother and get the house ready to sell when she finally agreed to move into an assisted living center.

I would much rather deal with the inconveniences of an apartment if it meant someone else was responsible for the upkeep and maintenance. Utilities will also be cheaper as you won't have to worry about watering the law during the summer months.
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Old 09-21-2018, 01:03 PM
 
Location: DFW
40,920 posts, read 48,822,759 times
Reputation: 54900
It's really hard to find anything decent today for $150k or less. I was going to recommend Frisico Lakes the Senior Community but the cheapest on the market is $275.

A little bit more info is where are you and how far away do you want her to be? You're going to need to go up north to maybe McKinney or North FT Worth, maybe Lewisville to get a decent affordable apartment.

Can't help on the Senior housing. I'll bet there is a huge wait list.
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Old 09-21-2018, 01:18 PM
 
Location: Kaufman County, Texas
11,816 posts, read 26,650,028 times
Reputation: 10537
I agree that renting would be the best way to go, particularly since you say she "isn't particularly good with home maintenance." If she doesn't keep the house up, or postpones maintenance too long, you will end up with even worse issues!

The Evergreen senior living communities are good for people who are on a fairly tight fixed income. And they have communities all over DFW: https://www.evergreenseniorcommunities.com/
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Old 09-21-2018, 02:11 PM
 
37,315 posts, read 59,474,655 times
Reputation: 25330
Quote:
Originally Posted by aggie972 View Post
My mom is selling her house (not by choice) that she lives in and inherited from her parents, and she is splitting the proceeds with her brother. Her half of the proceeds will be around $110,000, and I've gotten her preapproved for a $50,000 FHA mortgage. Which means she could purchase a condo for about $150,000 or less. She's looking in less expensive but still safe areas of North Dallas and East Dallas. Now I am trying to determine if she should buy a 1 BR condo or if she should rent an apartment. She receives a modest income from social security and has less than $30,000 in her 401k (no pension). She does some side jobs that provide her a little extra income, but nothing substantial.

The pros of renting are: more predictable costs, maintenance is covered, she'll have more liquid cash from the sale of her house for other expenses (this could also be a con if she spends frivolously), and finding a rental before the end of the year will be much easier than finding a home. The biggest downside is that she will eventually run out of money before she dies if she lives another 25 years. At this point, I would be interested in getting her into a complex that takes housing vouchers or into a low income senior complex. Public housing for people of all ages would not be an option due to safety concerns. My main question is whether the housing voucher/low income senior apartments are "decent" and actually available, or if they are mostly unsafe and/or very difficult to actually get into because of long waits. I sense private landlords also don't love taking housing vouchers (and I know some of you on this board are landlords, so I'd appreciate your input); I wonder how much difference it would make if I guaranteed the payment of the private-pay portion of the rent, and if the landlord were able to meet with my mom and she could pass the "eyeball test" to alleviate any concerns that she's going to trash the place.

The pros of buying are: Forced savings (I don't say this as someone worried about inheritance, just that her money last as long as possible for her), probably a better investment if she stays there for 20 years (although she isn't great with home maintenance), more stability in terms of not potentially having to move as often, and maybe a better play when it comes to means tested public benefits (although I'm not sure this really applies with her being on social security. I haven't fully explored what else she could qualify for and what the asset based means tests are). It may be a moot point if all the condos in her $150,000 price range are too unappealing to her or if that price proves to be too difficult for us to actually grab anything before she has to get out of her current house.

I'm very involved with helping her manage her finances, and basically her guarantor if she completely runs out of money. If/when she completely runs out, I will just help her out financially with paying for her living expenses, but taking her in to live with me is not something I'm considering (except for in a short term emergency type circumstance) given that I do have the means to avoid it, and do need to avoid it if I can. I just want to explore what options are out there to make her money last as long as possible.

Please no political posts about whether or not you agree with government subsidies. I work and pay a pretty good amount of taxes, so I have no qualms with my mom potentially getting some benefit from some of these programs. And I appreciate any helpful insight any of you may have to offer!

When I was teaching someone in my Dept had her mom relocate within TX to be closer to my friend because of her health --the mom's--she was diabetic and having some other health issues
She had only SS and that was not much--
My friend was able to help her mom qualify for apartment complex in North Richland Hills or Haltom City (kind of runs together in some parts) that was rent subsidized because her mom was lower income and perhaps because of her physical situation--

I don't know if you have considered something like that in area maybe at some distance since areas in Dallas might not be that safe---I say that only because I don't really know if rent-assistance apartments are spread across the Dallas city limits or focused to just few zip codes...

Personally--right now we are going down to Victoria to paint the interior of house my husband and I bought for his sister to live in--she is 18 yrs older than he is and was living situation that she was not comfortable with (doublewide in mobile home park) and her adult children did not have any interest in helping her out or offering her place to live...
Now that her health has gotten more frail and she realizes she can't take care of a house (she couldn't then--just would not admit it) her son and DIL asked her to move in with them...
House has been on market since March--probably priced little to high but the viewing remarks all mention the vibrant paint colors--so we are going to repaint--
Our agent said that it is difficult to get paint crew because so many are working out of town doing hurricane repairs even year after...

Buying a house for someone who might not be that able to take care of the maintenance, the yard, the taxes might not be best idea for a senior person...especially on limited income...

On the other hand...

We also have friends who bought and lived in house in BEDFORD for over 35 yrs.
Wife has serious dimentia the past 18 mo or so and he tried to take care of her at home but that was just more and more draining and dangerous in some ways...

They sold their house a week or so ago for almost 300K because the market in MidCities is strong--
It is a smaller, older home with a very small kitchen and. Aterrifically steep driveway (a big drawback for me)
It was an all cash offer which makes me think for rental property but he was grateful because now they can afford to live in a senior community--no medical services--his wife in one side w/other Alzheimer's patients and he on the side with just seniors...they are both mid 80s so could have another decade or more...
So the appreciation in their property was what allowed him to have some piece of mind...becaise apparently their SS and other investments are not that significant
His wife worked in school system for years and thought when she retired as school nurse she would be able to collect her spousal SS from her husband's account--but because of the SS offset rule--her state pension cancelled dollar for dollar all of her spousal SS--which they had been counting on as additional income in retirement--that was a nasty surprise...
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Old 09-21-2018, 03:11 PM
 
1,768 posts, read 562,017 times
Reputation: 2101
Do not a buy a condo. There will be monthly condo fees that increase every year, and special assessments any time the condo complex needs maintenance that they can't afford (which is all the time, because condos are chronically underfunded).
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Old 09-22-2018, 05:34 AM
 
3,678 posts, read 4,119,549 times
Reputation: 3332
First, my salutes to you for being a responsible kid. Second, how old is she? If she is 60, her life expectancy can be 30-40 years, if she is 75, it can be 5-20 years. That would determine her needs. I don’t have any advice on how to stretch her money to last long enough but sure hope you find a good plan.
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Old 09-22-2018, 01:19 PM
 
Location: Dallas
989 posts, read 2,427,290 times
Reputation: 860
I would break out an Excel workbook and run some 15 to 30 year scenarios. I would factor in:

Rising Rents
Rising Property Taxes & HOAs (do Srs. get a freeze on their property taxes in TX?)
Rising Property Values
Home Maintenance Costs
Monthly Income vs Monthly Expenses and the net difference
Any other tax related questions
Other investment options/interest rate movement
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Old 09-22-2018, 08:01 PM
 
1,427 posts, read 1,448,394 times
Reputation: 1780
Just a couple of thoughts..... many condos don't qualify for FHA financing...so that may limit the options on condos.
I do like the thought vs renting.
Rents go up and can go up significantly. I look back at many single friends and family who have been in the same apt for years. They're now paying double or triple rent years later. One just got kicked out of a place she loved after 12 years as the new apt owner wants to do significant upgrades and plans to change the rent from $900 to $1200 on her one bedroom.
If you buy a condo...once it is paid off you're just paying HOA and taxes. That is significantly less than rent is my guess.
Potentially you could also do a reverse mortgage if cash poor at the end.
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