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I am 56, single and downsizing( if my house ever sells.)
I have changed my mind in the last few years about buying a smaller house,
with yard work & outside care needed..
So that leaves me deciding between renting an apartment verses buying a townhouse it seems..
In the area I want to be 1000/month apartments are very similar to 200K Townhomes, which makes the math easier..
If I buy a Townhome I will pay for it in cash, so I am figuring the cost to rent for 10 years
verses using 200K to buy and the cost of that with lost investment earnings, insurance,taxes,HOA fees,
upkeep & maintenance(replacing ac/carpet/deckrepairs/appliances).
For investment earnings I am assuming that 200K could double in 10 years..That seems conservative to me ..HOA fees are usually 200/month around here/ taxes are high..
Renting would cost 120K for 10 years
Buying would cost almost 300K.
Equity doen't matter because the 200K is either in the bank still or in equity..
What am I missing..
We have upscale apartments around here with luxurios amenities that feel like a resort, if I ever decide
I don't like apartment living I can change my plan, an apartment keeps me more flexible about moving somewhere else although I don't see that happening..
It seems everyone works hard to own by retirement but is it the best financial plan ??
Typing this in the sun, so forgive typos..Its hard to see the screen..
It seems everyone works hard to own by retirement but is it the best financial plan ??
For some, "yes." For others, "no." It's a matter of choice and finances.
We own. We recoignize that houses are hard work and money pits. But it satisfies us and our choice is to have almost total control over where we live and what we live in, and die on our own land.
I own the apartment I rent out to tourists and rent the apartment I live in. My apartment is worth about 50k more than the one I rent but the net cash flow to me is $1500.00/Mth.
Yes; its matter of choice but remember that the rent continues and is not set at that price even for ten years. Also you have no asset value gained. Taxes etc is always paid by the renter in rent plus a profit for the owner.
Friend I would rent. I think 56 is too old to worry about the long term returns from owning a home. The older you get the harder it can be to PROTECT your home from creditors and credit scams and outrageous overcharging by medical providers,, Sell your home and put all of you cash assets in a safe place that can not be directly linked to you and then rent knowing your nest egg is safe.
This is definitely a personal choice and their are pros and cons to both. Since you will probably live approximately 30 more years, do you really want to pay rent for that time period or do you have another plan after 10 years.
Friend I would rent. I think 56 is too old to worry about the long term returns from owning a home. The older you get the harder it can be to PROTECT your home from creditors and credit scams and outrageous overcharging by medical providers,, Sell your home and put all of you cash assets in a safe place that can not be directly linked to you and then rent knowing your nest egg is safe.
Where is a place for cash assets that would not be linked ??
I had not even thought of the issue of what medical providers can and cannot take..
This is definitely a personal choice and their are pros and cons to both. Since you will probably live approximately 30 more years, do you really want to pay rent for that time period or do you have another plan after 10 years.
I just chose 10 years to compare but if it makes sense for 10 years , it would be the same the next 10 and so forth. Actually the invested money earnings would compound making the cost of buying and not investing more..
I also think another way to look at it is this;
If renting, the invested money earnings would pay for the rent without having additional taxes, insurance,HOA dues , maintenance, renovations, repairs, appliance replacements ect..
I have enjoyed home/land ownership while raising a family, but as a widow & empty nester I am in a different stage now and want to be free to travel and not have house care weighing me down & eating up my time . I also would enjoy the community that apartments/townhouses offer..I am almost a minimalmist
regarding the amount of "stuff" I own so I don't need to own more house to hold my stuff..
Sounds like renting would be the ticket for you for you once your home sells.
You want to travel, don't want to fuss with repairs and maintenance, your invested money would cover your rent... Why not?
Many people find that renting works better for them than buying. You may decide you want to live in Italy for a year. Or join the Peace Corps or would rather spend your time in any number of ways other than waiting for a plumber, painting....
Home ownership makes sense for some. Not so much for others.
Sounds like renting would be the ticket for you for you once your home sells.
You want to travel, don't want to fuss with repairs and maintenance, your invested money would cover your rent... Why not?
Many people find that renting works better for them than buying. You may decide you want to live in Italy for a year. Or join the Peace Corps or would rather spend your time in any number of ways other than waiting for a plumber, painting....
Home ownership makes sense for some. Not so much for others.
Good luck.
I really think it does make sense for me ,
but its hard to get comments from people that say renting is throwing away money..
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