Poll:Rent vs Own

[Olbidness]

I currently rent and it works for me. I find the place I want to rent and the place I want to buy are not the same. The house I rent is on the water with a great view but its not a "show place", old and could use some repair. It fits how I live. Low maintenance. If I were to buy I would want a house more inland, newer and larger. Owning means at some point I would want to sell and have some thought to ROI.

My dream is to be able to jump on a plane and spend a month or two in Paris, Rome, London, ect. and not worry about a house. That will be the Landlords job.

 

[FIREd]

We rent. We are still in our early 40s and I don't think we have found a suitable location to settle down for good yet. When we do, I won't mind owning again - although it will have to be something easy to maintain like a condo. I am done with houses with big yards.

 

[jjquantz]

We own. We sometimes feel that the square footage is more than we need, but after 35+ years of marriage we finally have a music room that is large enough for all of the instruments AND can have people in for a jam session AND can have seating for non-players. Don't think we will be downsizing until some health issue requires selling/giving away the musical instruments.

 

[Walt34]

We own, and it's paid off. In another five years or so the plan is to move to a CCRC and after the hefty admission fee it will be a rental but overall housing expenses will be roughly the same since we won't have to think about maintenance issues like the $3,400 water line replacement or the $3,500 A/C in the last couple of years.

 

[Meadbh]

We own. We sometimes feel that the square footage is more than we need, but after 35+ years of marriage we finally have a music room that is large enough for all of the instruments AND can have people in for a jam session AND can have seating for non-players. Don't think we will be downsizing until some health issue requires selling/giving away the musical instruments.

If you play and practice instruments, no matter how mellifluous the music, you will annoy neighbours in a condo or apartment building unless it is exceptionally well soundproofed. A SFH is best for musicians, I think.

 

[W2R]

Like you, I found the physical side of moving harder than the prior move six years ago. It was an extremely hot summer in Central Florida (moved from Tampa Bay to Orlando area, hot to hotter) which I think was a contributing factor. I also found the mental toll greater which I think was related to moving from an apartment (no responsibility for the upkeep) to a house filled with things that break and grounds that must be maintained (including the pool). It added a huge amount of stress which is now dissipating after 5 months as I get comfortable with the house and its needs.

I am so glad to read that it is dissipating for you now and that gives me some encouragement. Thanks. Now that I have had some R&R to cut back on the exhaustion, and also have better eyesight due to my recent cataract surgeries, maybe I'll stop running into things, breaking toes, having bad falls, and so on. I love my house so much, and it was worth it, but also I never want to move again if I can help it.

Being in the house during the summer's torrential rain storms was very nerve wracking and brought out my hurricane PTSD from 2004 when we got pounded by 3 hurricanes while living in Lakeland.

That's awful and I know first hand how bad hurricane PTSD can be. My sincere sympathies and I wish nothing but the best for you in extricating yourself from that awful mindset. I was incredibly lucky when moving because we didn't have any hurricanes or tropical storms threatening New Orleans this summer. I was pretty worried because the insurance companies won't write new policies when there is a hurricane in the Gulf, but it turned out that was not an issue for me either in buying or selling this summer. I was also worried about owning two fully paid off homes in New Orleans during hurricane season but that was over quickly as well, thank goodness.

 

[Alan]

We sold the big house in 2004 and moved into a luxury apartment. We have moved another 4 times since then, across State lines twice, and since retiring have spent 6 years doing extensive travel. Renting has worked out perfect for us, and the money from the house sale, which we had owned free and clear, has grown very nicely this past 11 years.

In April next year we'll be setting up a permanent home in England and expect to rent the first year or 2 but then probably buy a house.

 

[bclover]

I know situations differ, but I cannot understand retiring without owning your own home. And I mean owning free and clear. I is just a security issue for me, my backstop should all else fail. After owning your home, then travel, rent from time to time, do what you want, but you always have your own home. Not owning a home is just living too close to the edge for me.

? Why? serious question. what do you mean "living too close to the edge"?

If something catastrophic happens, what will owning do?? I owned my home in NJ, lol. My property taxes were still 1000 a month so if I was living close to the edge and lost my job, I would still have been SOL.

I do hear your sentiment often, and always try to understand. I'm retiring early next year (hopefully), I'll still have a mortgage, I don't feel any less secure, I guess than if it was paid off.

Just curious

 

[Olbidness]

I have a neighbor that saw it as his duty to convince me to buy a house. He would bring me the house listings of the neighborhood, I would tell him that I'm happy renting. Over and over this would happen. I finally asked him,"what part of I don't want to buy a house don't you understand ?". He finally stopped.

I do admit it feels slightly "un-American" to not want to own a house.

 

[W2R]

? Why? serious question. what do you mean "living too close to the edge"?

If something catastrophic happens, what will owning do?? I owned my home in NJ, lol. My property taxes were still 1000 a month so if I was living close to the edge and lost my job, I would still have been SOL.

Wow, parts of New Jersey are indeed beautiful, but to me, owning a home there sounds almost like renting it from the state. $1000/month? That sounds insanely high from here.

Here, for example, my property taxes at the old house were $79/month (except we pay them yearly). Many here pay no property taxes since we have a $75K homestead exemption. But anyway, my guess is that $79/month would be a lot easier to come by than $1000/month if one loses one's steady income. Not only that, but if over 65 and with a moderate income, one's assessment is frozen for life.

Also I'm not sure but I think I read somewhere that the elderly here who do not pay their property taxes just have them extracted from their estate upon death, rather than the house being seized for delinquent taxes.

Not that this is a tax heaven; they get their pound of flesh from sales taxes which add up to 8.75% in my parish.

 

[brett]

What did it for us other than the desire to lock and go plus not be bothered with home mtce issues?

We realized that our house was empty and we were not using it. 3700 sq feet yet the only rooms we used were the kitchen, family room,office, and bedroom. Five other bedrooms, three other bathrooms, two living rooms, a dining room, and an indoor hot tub that we never used.

There seem little point in paying the taxes, mowing the lawn, clearing the snow, heating the house etc. Best thing we ever did was sell-emotionally, physically, and most of all financially. We are much further ahead, not because of the proceeds but because we realized a significant gain on sale over a relatively short period and did very well on the invested home equity. This move actually served to make our retirement even more financially secure.

We may buy. But prices where we live are oil dependent. Home prices and rents are going down...and will be going down more over the next six months or more.

 

[Meadbh]

Best thing we ever did was sell-emotionally, physically, and most of all financially. We are much further ahead, not because of the proceeds but because we realized a significant gain on sale over a relatively short period and did very well on the invested home equity. This move actually served to make our retirement even more financially secure.

Plus, there were no taxes on capital gains on the sale of your principal residence!

 

[traineeinvestor]

Retired and own our place.

At the time we purchased, the rent was higher than the payments on a 20 year P+I mortgage and the interest rate was below the local rate of inflation. It was an easy decision and, financially, it has been the right one. We also used home equity to finance partnership capital (which was cheaper than either borrowing through another facility offered or selling other investments) so saved some money there as well. With 6 years to go before the mortgage is paid off, I am much happier owning than renting. Even without the significant price appreciation, owning has been the better decision financially and we have no plans to sell.

Given where prices are now, I am not sure if we would make the same decision today.

Longer term, if there is a downturn in the local property market, we could use home equity to buy another investment property.

 

[Aiming_4_55]

In CA (LA area), if I purchased a 3 or 4 bedroom home, just better than a starter home, it would be about $1,000 a month in property taxes. LA county sales tax is range from 9% to 9.5%. I guess I'll enjoy the weather when I can.

Wow, parts of New Jersey are indeed beautiful, but to me, owning a home there sounds almost like renting it from the state. $1000/month? That sounds insanely high from here.

Here, for example, my property taxes at the old house were $79/month (except we pay them yearly). Many here pay no property taxes since we have a $75K homestead exemption. But anyway, my guess is that $79/month would be a lot easier to come by than $1000/month if one loses one's steady income. Not only that, but if over 65 and with a moderate income, one's assessment is frozen for life.

Also I'm not sure but I think I read somewhere that the elderly here who do not pay their property taxes just have them extracted from their estate upon death, rather than the house being seized for delinquent taxes.

Not that this is a tax heaven; they get their pound of flesh from sales taxes which add up to 8.75% in my parish.

 

[EastWest Gal]

If you play and practice instruments, no matter how mellifluous the music, you will annoy neighbours in a condo or apartment building unless it is exceptionally well soundproofed. A SFH is best for musicians, I think.

+1

We will never be able to rent. I don't want to downsize the house, just the stuff. Piano, vibes, xylophone, drum set, synthesizers, amps, they take a huge amount of space. My piccolo fits in a pocket, but you wouldn't want to be nearby when I work in the high stuff (I wear earplugs).


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[haha]

For a 3 bedroom condo in a beach city, our monthly rent is $2,500.

Could you mention in what beach city you can find a 3 bedroom condo or apartment for $2500?

I don't doubt it, but I am quite interested in where this is, and how close to which beach.

Ha

 

[Rick_Head]

Plus, there were no taxes on capital gains on the sale of your principal residence!

Well, in Canada that's true. Don't know about the country/state that most of the posters here live in.

 

[Meadbh]

Well, in Canada that's true. Don't know about the country/state that most of the posters here live in.

Well, brett lives in Canada, so it does apply in his case.

 

[hnzw_rui]

In CA (LA area), if I purchased a 3 or 4 bedroom home, just better than a starter home, it would be about $1,000 a month in property taxes. LA county sales tax is range from 9% to 9.5%. I guess I'll enjoy the weather when I can.

That probably has more to do with such houses selling for at least $800K (probably closer to $1M) than high property tax rates. Iirc, tax rate in LA county is something like 1.125%.

And yeah, absurd prices are pretty much what's stopping us from buying. We're actually fine with starter homes (minimum 2B/2B for family of 4) but even those go for $600K.

 

[OrcasIslandBound]

My property taxes are 1800$/ year in North San Diego County. But having bought in the 1982 is why they are so low. However, in our future retirement home, which we bought 3 years ago in Washington St, the property taxes are 3k$ per year. I can't fathom $1k/month property taxes.

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[simple girl]

When we retire in a few years (hopefully!), I keep telling myself that we will sell our house here in AL and rent in FL first to learn the local area better before perhaps buying. We learned our lesson when we first moved to AL from PA; we bought right away and then discovered after living there a while that we didn't like that location very much.

We had to go on assignment for DH's job for several years, so we ended up turning that townhouse into a rental. When we moved back here we decided to keep it as a rental, while we bought our current home in a location we like much better.

If our current renter moves out when the lease is up 6 months from now, we are considering selling our rental and buying something in FL that we rent out until we move there...but still need to investigate the tax consequences of moving into your rental.

The closer we get the more excited we get! Shooting for 2018 now as that is the year DH will turn 55 and we can access his 401K without penalty. It will give us more security than counting on our taxable accounts soley. We could retire now on a careful budget, but DH still loves his job and wants more security before we pull the trigger, so he has chosen to continue working.

 

[SJ1_]

home ownership poll

I am retired and I own

 

[ChicagoGal]

I own now, but the plan is to sell next year and rent, at least for the next few years. Reasons being:

• I'll still be working for the next few years, so want to stay relatively close to work. Once I retire, I'll have more options geographically.
• I've been in a SFH for 20 years. I think I want to go to the apartment/condo/townhouse concept, but not sure I can share walls again. Better to try than buy.
• I'm just tired of taking care of the house all by myself. And by that I mean finding (and paying) the person to fix, mow, shovel, paint, etc.
• My property taxes are now over $9,000 and I just got a new assessment that had the house's assessed value go up 18%. Can't wait to see what next year's taxes look like.
• Property values are finally back up to about 3% over what I paid for my house 12 years ago. Don't see them going much higher any time soon.
• I should be able to get a very nice apartment for about $500 or more less per month than my mortgage/tax payments.

Yep, there's a risk of rental prices going up. But the $300K or so of equity I have in my home will help offset that. And if I find that I'm not comfortable with the uncertainty or the lifestyle, I can always buy again.

At least that's the plan. And we all know how plans change

 

[Cobra9777]

We own a house with no mortgage. I'm retired; DW still working OMY. The house is way too big for our needs... 4500 sqft on 2.2 acres with a pool. We bought it 12 years ago when the kids were young teens. We will definitely downsize at some point despite a strong emotional attachment.

I'd consider renting at that point if there was a clear financial justification. But I just don't see it. I've used all the online tools and compared results with my own models. There does not appear to be a strong case one way or the other except under unusual circumstances or biased assumptions.

The non-financial considerations also favor owning for us. We enjoy changing things on a whim. I'm a DIY nut. We take great pride in the house and "making it our own," inside and out. It's part of our identity. So, even after we downsize, we'll probably buy rather than rent, unless something changes drastically on the financial side of the equation.

 

[Danmar]

Seems to me that in retirement, having total control of your living arrangements would be important. It would really irritate me if the landlord decided to sell or move in himself, kicking me out in the process. Also, not being able to decorate or upgrade to my tastes would be an issue. In most cases owning probably costs more but in my circumstances worth it. Maintenance can be laid off on hired help and we do. The small bit of maintenance I do is mostly enjoyable.

It is certainly not about amassing assets or extra space. These need not be negatives of owning in my view. Buy a smaller house if the old one is too big or a condo.

Retirement, in my opinion is all about control, ie doing what you want, when you want, if you want. In my view renting compromises this somewhat. For some probably not an issue but I have found since retiring 9 years ago, control is increasingly important to me.

Many have extolled the advantages of renting in the context of flexibility and I can see that. I guess I have gotten around that somewhat through multiple homes. Obviously not practical for the vast majority. So is it flexibility vs control and security? If so, take your pick.