Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Buying a second home
Old 06-29-2014, 11:08 AM   #1
Recycles dryer sheets
 
Join Date: Nov 2004
Posts: 143
Buying a second home

Hi-
I recently retired early at the young age of 66. I'm single. I have a pretty good monthly retirement income of $5000+ (including social security). It's a secure income, and rises a little every year. I also have about $250,000 in additional investments, including my bank account.

In addition to all that, I purchased a house in Washington state, and put 2/3 of the cost down, so my monthly payment (including mortgage, taxes and insurance) is $560.

Here is my question: I may have made a mistake in buying my house. I am finding that the yard work might become more than I can handle in the future. Also, I want to travel, and closing a house for months at a time might be foolish.

I'm actually contemplating buying a condo or townhouse in a nearby small city of Bellingham. It would be small, and the cost might be as much as $200,000. I could put 2/3 of the cost down. or even buy it outright. My reasons for doing this is that eventually I would want to live in it full time, but perhaps could rent it out in the meantime. I would eventually sell my house, but not be in a hurry.

Do you believe that this is risky? Is it any more risky to have my money in the stocks and bonds I currently have? Many of you have far more expertise in this that I have.

Regards,
Rob
__________________

__________________
Rob is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-29-2014, 11:33 AM   #2
Full time employment: Posting here.
 
Join Date: Mar 2008
Posts: 637
I think the answer depends in part on your spending. Can you support yourself very comfortably on 60K a year, including taxes and health care?

Then consider that you may have only $50K left in the bank. If you homes need a major repair, your car dies, or you need more money for your trips, where does that come from?

If I were you (which I am not) I would want more money in the bank as a cushion. Why not consider selling your current place- which you think is a mistake anyway, THEN buy and use the smaller home as your base?
__________________

__________________
bizlady is offline   Reply With Quote
Old 06-29-2014, 11:39 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,017
Quote:
Originally Posted by bizlady View Post
I think the answer depends in part on your spending. Can you support yourself very comfortably on 60K a year, including taxes and health care?

Then consider that you may have only $50K left in the bank. If you homes need a major repair, your car dies, or you need more money for your trips, where does that come from?

If I were you (which I am not) I would want more money in the bank as a cushion. Why not consider selling your current place- which you think is a mistake anyway, THEN buy and use the smaller home as your base?
+1

Bizlady knows what she is talking about. She has lots of real estate experience.
__________________
Meadbh is offline   Reply With Quote
Old 06-29-2014, 11:42 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,397
Interest rate is low enough now that I would not mind carrying a higher mortgage on the 2nd place. I would not exhaust my cash. I would then sell the 1st home ASAP.

I myself do not mind carrying two places for a few months, as it would make it easier to move. Else, you have the hassle of putting things in storage, or to rent or move into an apartment for the interim. I hate moving, so the fewer moves, the better. Of course it all depends on how much "stuff" one owns.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 06-29-2014, 12:05 PM   #5
Recycles dryer sheets
 
Join Date: Nov 2004
Posts: 143
I appreciate the response. Bizlady, I agree that it is perhaps better to have more reserve money, and buying a second home will not allow that. However, NW-Bound has a point about buying the second home (condo) first and then selling the firsthouse. It might take some time to sell it. I don't want to have two homes if that causes problems financially, but just wondering if it is the smart to buy a condo/townhouse first (and very carefully) and then sell the house after I've moved in.

Thank you again

Rob
__________________
Rob is offline   Reply With Quote
Old 06-29-2014, 12:14 PM   #6
Dryer sheet aficionado
 
Join Date: Mar 2014
Location: Lexington
Posts: 34
I would sell the house first, then buy the condo.
__________________
treeofpain is offline   Reply With Quote
Old 06-29-2014, 12:26 PM   #7
Full time employment: Posting here.
Dog's Avatar
 
Join Date: Apr 2006
Posts: 781
I agree with treeofpain. Any tax implications involved that may impact your decision?
__________________
"Tell me, what is it you plan to do with your one wild and precious life?" - Mary Oliver
Dog is offline   Reply With Quote
Old 06-29-2014, 12:57 PM   #8
Full time employment: Posting here.
 
Join Date: Jul 2011
Posts: 721
Sell house one before buying the condo to maintain your cash reserves and minimize unexpected expenses. You might be able to swing two, but IMO yes, potentially too risky.
__________________
panacea is offline   Reply With Quote
Old 06-29-2014, 01:31 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,017
Why not sell the house and rent a condo? This gives you breathing space, and you have the option to continue renting if you wish. Less financial risk too.
__________________
Meadbh is offline   Reply With Quote
Old 06-29-2014, 01:38 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,714
Send a message via Skype™ to kcowan
I think you need to decide what you want to do when retired first. Yes the jobs required with home ownership can interfere with a retirement lifestyle. I would convert your home equity into cash, invest it and rent. You can rent an apartment or even a condo. You can even sublet a rental apartment when you travel. We do that every year when we go south. Often straight rentals are more flexible than condos for subletting. Ours is pet-friendly so we have no problem renting it.

The key thing is to not get tied down until you decide what kind of lifestyle you want.

(And BTW 66 is not early retirement!)
__________________
For the fun of it...Keith
kcowan is online now   Reply With Quote
Old 06-29-2014, 03:10 PM   #11
Recycles dryer sheets
 
Join Date: Nov 2004
Posts: 143
I will not rush to sell my house, but instead looking for a plan. My house is brand new, and therefore, the maintenance is low. It's only 1450 sg feet, and the lawn is very small. It still requires more time than I'd like to put in. It's the first house I've ever owned, since I worked overseas the past 40+ years.

I think I should try to stay in the house for at least another year and see how it goes. I will travel for 3 or 4 months this winter, close my house up and taking care to make sure it will be fine while I'm gone. If that is a success, then I might even continue to own it for a few more years. Does that sound like a plan?

Kcowan, I know 66 is not early retirement. Just a little humor.

Rob
__________________
Rob is offline   Reply With Quote
Old 06-29-2014, 03:33 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Quote:
Originally Posted by Meadbh View Post
Why not sell the house and rent a condo? This gives you breathing space, and you have the option to continue renting if you wish. Less financial risk too.
+1. This is what I would do, and recommend.

Certainly staying where you are is an option. You might look into hiring someone to do the yard maintenance for you. I wouldn't worry about closing the house for a few months.
__________________
Animorph is offline   Reply With Quote
Old 06-29-2014, 03:44 PM   #13
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,834
Rob, how about hiring somebody else to do the lawn? It might be cheaper than trying to carry two homes. Even here in New Orleans where the grass grows so fast you can nearly hear it growing, and with a relatively expensive lawn guy, it only cost me an average of $104/month last year. In your area, there might even be months when the lawn doesn't need mowing at all.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 06-29-2014, 03:53 PM   #14
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,804
My BFF lives in Bellingham, and I lived there for several years in the early 90's. I love that city. I have one friend who lives in a medium rise condo downtown, near the bay. And another acquaintance lives in a condo in Fairhaven. It's an excellent lifestyle. Both are in very walkable neighborhoods.

I can't comment on the sell current home first, or own two homes idea... You'll have to make that decision. I just wanted to support the idea of a condo in Bellingham, in general.
__________________
rodi is offline   Reply With Quote
Old 06-29-2014, 07:43 PM   #15
Moderator
Ronstar's Avatar
 
Join Date: Aug 2007
Location: A little ways southwest of Chicago
Posts: 9,341
I would sell the house first. While waiting for the house to sell, explore the condo/townhouse market. If you know the area very well and find a condo you like and fits your needs, then buy the condo after you have sold the house. If you're just learning about the area where you're considering buying a condo, then rent for a while until you get enough background info to make the buying decision. You don't want to repeat a "mistake" of buying something that doesn't suit your needs.
__________________

__________________
Ronstar is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Renting or buying? What is best for a second home. Frugalityisthenewblack Life after FIRE 43 02-25-2012 09:45 PM
Buying a home (or two) away from home saltyfoam Life after FIRE 2 02-15-2012 03:42 PM
Questions about buying a second house bank5 Other topics 3 08-13-2009 05:57 PM
Buying Second Deeds of Trust / Notes Craig FIRE and Money 4 08-23-2005 02:36 PM
Second Home Mortgage -- Internet Lenders?? Rich FIRE and Money 4 02-24-2005 12:50 PM

 

 
All times are GMT -6. The time now is 12:22 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.