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Equity is only good if you sell. Home ownership is only an investment if you sell. My problem is that, realistically, the mortgage will outlive me. I also am fearful of being “stuck” in a house where the neighborhood has gone down or I’m stuck trying to sell it.
Equity is only good if you sell. Home ownership is only an investment if you sell. My problem is that, realistically, the mortgage will outlive me. I also am fearful of being “stuck” in a house where the neighborhood has gone down or I’m stuck trying to sell it.
Well I understand the mortgage might outlive you but your inheritors can sell it and pocket the difference.As for the neighborhood going down that’s a possibility and you should always keep an eye for that and sell if it starts going down, just as you would have moved if you rented in area.
Everyone has their own opinion, I for one prefer to buy, my mortgage has not increased as has those renting in my area, to the point that I couldnt afford to rent in my current location. I also prefer being able to do any changes to my home as I please.
But for my example my mortgage plus property tax, insurance and HOA adds up to around 1200, a rental right now would be 1900 in my building. Plus once I sell I will take a nice chunk of money with me.
Equity is only good if you sell. Home ownership is only an investment if you sell. My problem is that, realistically, the mortgage will outlive me. I also am fearful of being “stuck” in a house where the neighborhood has gone down or I’m stuck trying to sell it.
Those are valid concerns. When we bought our first house 30 years ago, it was a small townhouse that didn't appreciate well at all. After 10 years we traded up. We tried to sell the townhouse but it sat on the market for 6 months without an offer, so we were forced to rent it out. When the market improved 3 years later, we sold it and only walked away with $4,000. The next place was in the same town but was a single family house but we fared far, far better when it came time to sell. We had a big advantage going for us---a future rail station was on its way.
All that said, after living in this town, many areas hit the skids which affected crime rates and the quality of the schools. We could never have imagined that happening when we moved in.
If you decide you don't want to ever buy a house or condo, my suggestion is to put away some money every month. I know that sometimes it isn't the easiest thing to do but if you can manage it, be sure to do so.
If you do decide to buy, be sure to learn about the area you are considering. Is it, for example, a blue collar area? Not that that is a bad thing. However, the town we lived in was when we moved in a mostly blue collar place with some white collar families. At the time, we moved there because it was where we could afford a starter home. For quite awhile it was a decent town. As newer communities opened up in the area, many people who traded up left and bought the new homes. Before those new communities existed, people who traded up stayed in the town. So take note of the surrounding areas. Is there lots of new development going on around an older community? If so, take that into consideration. In the older communities, is there good public transportation, particularly commuter trains into the city? That will help with long term property values, IMO. Do the schools have a good reputation? Is the area a low crime one?
Don't worry about out having a mortgage that will outlive you. Your heirs will sell the property and most likely be able to get some equity out of it after the mortgage balance is paid off.
In the end, you and your family, after weighing the advantages and disadvantages, make the decision that suits you best.
Hewitt says that 80 percent of his clients don’t want to rent because they don’t want to lose control over their home to a landlord and don’t want the possibility of paying higher rent in the future.
“Those clients that choose to buy tend to make a large down payment or buy with cash from the equity from the sale of their home. and then try to cover their property taxes, insurance and maintenance costs with their Social Security or pension income,”Hewitt says. “They can use their investment income for discretionary spending.”
Tips for baby boomers moving to the city:
● Start getting rid of things a little at a time to prepare for downsizing.
● Imagine yourself living in various locations to prepare yourself mentally for the move.
● Evaluate your health conditions and estimate whether you will need to move to an assisted-living facility within a few years.
●Decide whether you want to live near family members and, if so, whether they plan to stay in the same area for the foreseeable future.
● If you plan to move again in five years or less, renting is usually the better option.
● Consider making a temporary move to a rental before deciding on your next permanent home.
● Compare the cost of renting with the cost of buying, keeping in mind that the tax advantages of buying could be less important in retirement if you have fewer itemized deductions.
● Make sure you carefully evaluate the design of your new place so that even if it’s small, there isn’t wasted space.
● Check pet rules and other rules of apartments and condos to make sure you can live with them.
move to a place with some form of rent stabilization .
it does not mean below market rents usually as that ship sailed but basically you are not under the whims of a landlord as far as making you move or out of line rent increases
It really depends on your personal preferences. If you don't mind all the upkeep, unforseen expenses involved in owning a house...If you are handy, like fixing things, enjoy lawn mowing, snow shoveling and gardening (or are happy to pay others to do it) and don't mind being tied to one place for years, then home ownership might for you. If you prefer a more carefree and worry-free life and want to spend your time doing other things, and want flexibility to get up and move if the whim strikes you, then renting may be the way to go.
We've been home owners (20 years) and now we are renters and we much prefer renting. It has liberated us...and our finances. We couldn't save squat when we owned a house because we were constantly having to spend money to keep it maintained and fixed. Our property taxes were constantly going up too. We also lost money when we sold our second house ($30k) and it took years to sell. It's not always a good investment. Now, as renters, our expenses are very stable and far less and our worries are far less. We travel and eat out more and when something breaks, we don't sweat it. It's the landlord's problem. We have a lot more free time too and we are having a lot more fun.
Instead of counting on house equity, we are taking all the money we are saving now because we are renting and putting into our retirement account which is growing rapidly.
Equity is only good if you sell. Home ownership is only an investment if you sell. My problem is that, realistically, the mortgage will outlive me. I also am fearful of being “stuck” in a house where the neighborhood has gone down or I’m stuck trying to sell it.
Buying is my suggestion but only if you plan to stay put for several years. Equity can also be used to re-finance and pull money out if you bought a house in an area thats growing in value. The work begins finding a good location, affordable, and a mortgage that works for you. A 30 yr fixed is smart regardless of what your age is.Payments are lower, you're using the banks money, and if you sell in 10 yrs you're going to pay off the Mortgage anyway.Back when Mortgage Rates were 10-15 % It was a killer to own a house and carry a big mortgage.Renting can be a revolving door with lots of restrictions, good for short term unless you find a great deal that you're comfortable in. Even with new Tax laws you can write off up to 10,000 in taxes and your mortgage interest making it even more logical if you plan to stay there. Just buy within your means, good area. and a reputable mortgage company.You can test the waters by getting pre-approved, (not pre -qualified) by your bank. It's free and you'll know what you can afford. See if you able to afford a good area without using too much savings. My opinion, has worked for me, own a house in NYC, and Forida, And I'm not rich by any means...Just Good credit, and buying smart...not that hard, Good luck.
So no one secured their retirement home BEFORE they retired?
vs the OP? He's an oulier.
It's VERY rare for financially sound people to have NOT bought a house.
At 60ish it should be all paid off and been updated/refreshed to last another 30 years.
Whether it becomes their 'retirement home' at 65 going forward or not... they have the asset.
today manhattan and the boroughs all have well to do renters . there are renters today in the gentrified areas that live in rentals where a studio's at 3500 a month , 1 bedrooms at 4500 and 2 bedrooms at 5k and these are nothing special apartments .
this is just what these desirable areas get .
so it is going to be a location thing . renters are a very mixed bag
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