Own vs. rent?

[linkerbink]

I plan to retire in 1 year (357 days, to be exact) at age 60. My condo will be paid for in 11 years (from now) which I am paying with part of my late husband's PERS pension. Here is my quandry...I am toying with the idea of selling when I retire (I should be able to clear about $180,000, as this is a very popular condo development) and move to an apartment. I want to do more traveling, and I am thinking that I would feel more comfortable leaving an apartment for several months at a time than I would a condo, as I always worry about frozen pipes, etc. With what I am paying now plus condo fees, I could get a nice apartment. I figure I could then invest the $180K. Is this reasoning sound, or is it a matter of "do what feels best"? Has anyone else faced this question, and how did you come to a decision?

 

[renferme]

Some years ago while between marriages, I had a condo nearby, 2 br, 1 bath.
Mortgage payment (P,I,& T)was less than the average rental unit in the area for
the same size unit.
Personally, I would not like to rent.

 

[linkerbink]

Hi, Bennevis. I know I would be putting out a bit more per month in rent than I currently do in mortgage & condo fees. However, there's also the tax problem, which is rather high here as it is in a very desirable school district. There's also the "peace of mind" issue, though I guess I could hire someone to take a cruise through the place one a week or so to make sure all is well. I'm currently working on a "pros vs. cons" list to help clarify things.

 

[Nords]

With what I am paying now plus condo fees, I could get a nice apartment. I figure I could then invest the $180K.  Is this reasoning sound, or is it a matter of "do what feels best"? Has anyone else faced this question, and how did you come to a decision?

My father has done this for the last 15 years or so, although his trips are generally a week or two of driving around the Rockies.

He likes the lack of maintenance/yard work and being able to move whenever he finds a better deal.

However it'd be a tough situation to be a couple months into a Thailand resort fantasy vacation and learning that your landlord back home wants to sell your place out from under your lease...

 

[linkerbink]

Hmmm...another thing to think about. I've never rented (went from Navy BOQs to marriage/home ownership) so there are things I would not consider due to lack of experience.

 

[vic]

As a landlord I am always making sure I don't end up with people that plan for the shortest time possible. Tenants sometimes forget that a landlord can kick them out without any reason with a 30 day notice on a month-to-month contract. My month-to-month tenant got on my nerves and I served her the 30 day notice. Oops a little unexpected for her since she had all her fun trips planned during that time.

You may want to check they types of leases customary in your area. The standard realtor's contract that I use makes my tenants liable for yard maintenance, frozen pipes, pest control (except WDI), plugged drains etc.. As an apartment renter you never know what crazy transient lives next to/above/below you. I would consider rentiing an apartment it if the finances were right though.

Vicky

 

[Nords]

Hmmm...another thing to think about.  I've never rented (went from Navy BOQs to marriage/home ownership) so there are things I would not consider due to lack of experience.

If travel will be a big part of your ER lifestyle, you might want to contact the Kaderlis & the Terhorsts.  

The former maintain a home while they travel while the latter were homeless for a couple decades before deciding to build new.

Shokwaverider has also been renting for a while and might have some perspective.

 

[linkerbink]

Nords - thanks for the resources...I may check with them for thoughts.

Vicky - yes...neighbors! But I can't choose my neighbors in my condo, either. I live in PA, and I don't know if there are standard leases used here, or if there is any legislation covering them, so I have a lot of homework to do before I decide.

 

[justin]

If travel will be a big part of your ER lifestyle, you might want to contact the Kaderlis & the Terhorsts.

The former maintain a home while they travel while the latter were homeless for a couple decades before deciding to build new.

Anybody know any more details about the Kaderlis' home in the US? Are there similar properties in other parts of the country? What type of housing accomodation is it? I've seen it described as "adult resort community" - but what? a condo in one of these places? A "condotel"? Can anyone provide links to similar places for sale now? Curious about the costs and typical amenities provided.

 

[Nords]

Can anyone provide links to similar places for sale now?

We toured La Mirage in San Diego a decade ago and it's still going strong.

Nice places, central location near the 8/15 merge & Jack Murphy Stadium, interesting mix of older affluents & younger hardbodies (plus some affluent hardbodies), and near all the metro San Diego entertainment stuff.

 

[justin]

We toured La Mirage in San Diego a decade ago and it's still going strong.

Nice places, central location near the 8/15 merge & Jack Murphy Stadium, interesting mix of older affluents & younger hardbodies (plus some affluent hardbodies), and near all the metro San Diego entertainment stuff.

I called them up, and they told me it was all rental apartments and no units were for sale. Looks nice though.

One thing I thought was odd is that a lot of the floorplans didn't have closets. Is that a California thing? It looked like there was an armoire in the bedroom, but no conventional closet. Weird.

 

[AltaRed]

I want to do more traveling, and I am thinking that I would feel more comfortable leaving an apartment for several months at a time than I would a condo, as I always worry about frozen pipes, etc. With what I am paying now plus condo fees, I could get a nice apartment. I figure I could then invest the $180K.  Is this reasoning sound, or is it a matter of "do what feels best"? Has anyone else faced this question, and how did you come to a decision?

I think it depends on what kind of condo development you are talking about. You mentioned risk of frozen pipes... so does that mean townhouse style condo? If so, you do have more risk if it will be vacant for extended periods, anything from a heating system shutting down to a pipe bursting to burglary. On that basis, an apartment may be less risk (less personal responsibility).

If what you have is a stacked townhome, or apartment style condo, then I see absolutely no difference between the condo and an apartment. Your pipes won't burst due to neighbors on all/most sides no matter what happens with your heating. As a precaution against burst pipes, you can turn your water heater on to pilot only...and close off the main water valve and simply leave. Apartment style condos are less susceptible to burglary - neighbors are too close. Personally, I'd hold on to the condo in that case (and capture the equity increase and slowing paying off the outstanding loan balance), but it really is a case of doing "what feels best".

 

[linkerbink]

It's a townhouse-type. It's a two-story duplex, connected to only one neighbor, and that's along the garage. I have a great neighbor now, but who's to say how long that would last, as she is also having thoughts about down-sizing. Thanks for your input.

 

[justin]

Consider that $180000 net from the sale would give you $600/month at a 4% annual SWR. In my neck of the woods, that would pay for a basic apartment or half of a nice higher end apartment.

 

[lazygood4nothinbum]

Has anyone else faced this question, and how did you come to a decision?

starting to face it now, but won't decide till later.

on the one hand my house is practically paid for, tax increases are restrained by homestead exemption, insurance is going up but all expenses still much less than rent.

on the other hand if i sold i'd have that much more money for travel and i wouldn't have a house to worry about when i'm gone.

for me i think it depends on how much i'll enjoy travel. i'll start off light. 3-4 months in summers, best time to get out of florida anyway. if i like it a lot and want to travel full time, maybe it would be best to sell and rent 6 months at a time or more in different locations.

of course the other option is similar to the rv threads: sell, move aboard boat, travel and take the "house" with me. i guess that's why some liveaboards name their boats "turtle."

I thought was odd is that a lot of the floorplans didn't have closets. Is that a California thing? It looked like there was an armoire in the bedroom, but no conventional closet. Weird.

could be a warm weather thing. we don't have the closets in florida that you have up north either. certainly don't need a front hall closet for the winter coats. don't need a mud room neither. we just need some drawer space for our teashirts and bathing suits.

didn't look at the floorplan you mention but could be a conversion? i thought i remember hearing from a realtor that  a room is only considered a bedroom if it has a proper closet.

 

[Martha]

The word "on the street" is that apartment rents are going to go up, and up and home prices will go down. If true rent until that happens.

 

[linkerbink]

Yes..I just read that somewhere, too. Since home prices are high and mortgage rates going higher, more people are renting because they can't afford to buy. Eventually, the see-saw tilts one way then the other.

 

[justin]

could be a warm weather thing. we don't have the closets in florida that you have up north either. certainly don't need a front hall closet for the winter coats. don't need a mud room neither. we just need some drawer space for our teashirts and bathing suits.

didn't look at the floorplan you mention but could be a conversion? i thought i remember hearing from a realtor that a room is only considered a bedroom if it has a proper closet.

Around here, not having a walk in closet hurts the value of a house supposedly. I've got an older 1970's split level with regular (non walk-in) closets and they work just fine. Maybe warm weather folks have less crap to store.

 

[linkerbink]

Like...sweaters, parkas, snow boots, gloves, etc., etc., etc.

 

[Nords]

Maybe warm weather folks have less crap to store. 

I've never been able to get a closet for our longboards...

 

[Brat]

It seems that OP has two issues: pipes breaking and property taxes.  As another poster has mentioned the broken pipe risk can be taken care of by turning off the water I would add wraping pipes with heat tape.  Property taxes are directly related to property value and, usually, community services (including schools).  Downsizing in the same community is an option.  I would not move to rental housing.

Now, I will throw out an off-the-wall suggestion: consider co-housing.  IMHO they are great for a widdow.  Not a retirement community, per se, but a condo-type neighborhood.  I can't find any in PA but there are a number on the west coast.  The new group in Eugene, OR  has tax abatement; Davis, CA also has one (both have moderate climates and are cities in Forbes list of inexpensive university communities).  If you are considering a move out of your area that type of housing is worthy of consideration.  You need to know that I am a charter member of the hippy generation so co-housing is right up my age-alley, but not all of them are organic gardens and Birkenstock shoes.  http://abrahampaiss.com/ElderCohousing/eldercommunities.htm
http://www.cohousing.org/default.aspx

 

[donheff]

You need to know that I am a charter member of the hippy generation so co-housing is right up my age-alley, but not all of them are organic gardens and Birkenstock shoes.

Me too. The idea appeals but DW will have none of it. She is 4 years younger and missed the earlier formative years of the sixties

 

[honobob]

As a landlord I require in the lease to be notified of any absence over 7 days.  I would NOT want a tenant that had prolonged absences.  A vacant unit deteriorates more than normal wear and tear.  I would sell only if you needed the money,  think about what rents were only 10 years ago. Think what they might be 10 years from now. 

My plan when I retire is to travel 5-7 months a year and Condo Swap my place.  Not sure how that will work out but if it doesn't I'll let family  and friends use it, have house sitters or short term renters.  I would not want to leave it empty for long.  Of course it helps that it's two blocks from Waikiki Beach.

 

[Brat]

Donheff: Me and thee should swap spouses, but I suspect our kids would find it odd. My mate is a bit older.     Ah well, little do they know what fun they missed.  

Now if I could find a Ma Cass CD for our 2-year old Gandson there is hope for the next generation.

 

[spideyrdpd]

They have lots of adult resort communities in Florida
I am not sure what some of them have beyond a pool and the fact that they only let in a small % of peoples under 55.

I would get a house sitter .
Finally something me and Martha agree on. Rents will be going up.
I cant see downsizing your condo as paying off. The costs to sell and buy and then you would have the new issues to deal with. Sounds expensive . Maybe when you travel you will find a place that you like better ...