Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
should I buy or rent at age 64
Old 07-26-2017, 03:37 PM   #1
Dryer sheet wannabe
 
Join Date: May 2010
Posts: 14
should I buy or rent at age 64

All, long time follower and enjoy the wisdom this community offers. the wife and I feel the need to downsize and will make a good profit on our investment in the current house. for discussion lets say 300k. we want to relocate to upper Seattle (Everett or Arlington) from the midwest to be close to our grandchild where housing is more expensive for less. That being said and at mid 60's for both of us would we be better investing the profit into purchasing and paying off a home or taking a loan to preserve the profits or just renting? thoughts? We understand the neighbors and condo close living thing discussed in other threads, we are purely looking at the financial aspect only for retirement which we both enjoy currently.
__________________

ontap55 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 07-26-2017, 03:45 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Dec 2010
Location: Midwest
Posts: 1,640
You need to spreadsheet it out. What would a suitable home cost? Would you have to take out a mortgage? How much would comparable rents be? This is not a "one answer fits all situations, or a rule of thumb" question.

Bring us some numbers. You will most likely get some thought provoking answers.
Good luck.
__________________

brucethebroker is offline   Reply With Quote
Old 07-26-2017, 03:47 PM   #3
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 2,675
Do you expect real estate prices in that part of the country to increase, decrease, remain the same going down the road?

What about your opportunity cost (ie same question applied to market based investments)

Seems like that would be the biggest financial aspect driving this decision.

-gauss
gauss is online now   Reply With Quote
Old 07-26-2017, 04:21 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,255
Since you are moving to live near a grandchild I would rent . Children change jobs and move so you may be stuck somewhere you really do not want to be .
Moemg is offline   Reply With Quote
Old 07-26-2017, 04:43 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
Quote:
Originally Posted by Moemg View Post
Since you are moving to live near a grandchild I would rent . Children change jobs and move so you may be stuck somewhere you really do not want to be .
+1. My oldest sister, who im on bad terms with, and her husband who I detest, used to live in long island. My sisters in laws were life long renters. They had a rent CONTROLLED apt(not rent stabilized) their rent was less than 70 bucks a month hahahaha. Any how they buy in a over 55 community to be near their only son and grandchildren in long island. These people hadnt even owned a car in 40 years. They buy a car, buy the house, and as a house warming gift my brother in law decides he is going to move to a new job in the Midwest . Good thing he was an only child he would be the poster boy for getting disinherited. Moral of the story rent, rent, rent.
__________________
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
Blue Collar Guy is offline   Reply With Quote
Old 07-26-2017, 06:03 PM   #6
Full time employment: Posting here.
 
Join Date: Jul 2011
Posts: 831
I am in a similar situation. On road now so can't provide links. There are some good buy vs rent calculators. I started there.

Right now, I am considering working with DD/SIL, to purchase a house that we will rent. They have down payment but if not I can gift or loan part of it. They would have a great tenent and I would be happy to see the equity and tax benefits going to them. As with any deal, you will need to consider the risk/family fallout that could occur.

If that does not work out for us, I will likely rent but my situation is beyond the simple financial analysis.
davef is offline   Reply With Quote
Old 07-26-2017, 07:36 PM   #7
Dryer sheet wannabe
 
Join Date: May 2010
Posts: 14
Great suggestion. I had no idea those calculators existed!
ontap55 is offline   Reply With Quote
Old 07-26-2017, 07:53 PM   #8
Full time employment: Posting here.
 
Join Date: Oct 2012
Location: Reno
Posts: 836
Seattle is in an strong real estate bull market (my youngest who works for MrSofty bought a house in Renton last year and he made bids on two houses before landing one), so I would strongly consider renting, particularly since circumstances (your grandkid) can change.
We considered buying on the Olympic Peninsula two years ago, before deciding on Reno.
RobLJ is offline   Reply With Quote
Old 07-27-2017, 02:39 AM   #9
Dryer sheet aficionado
 
Join Date: May 2010
Posts: 47
Divide the monthly rent by the cost of buying the house. If you can rent for less than 0.4% per month, of the cost of the house, which is the case in many expensive cities then go ahead and rent.

As the rent gets closer to 1% of the cost to buy you can consider buying as an investment as it's a great place to rent it out.

Anything in between can be either or so why not rent anyway and keep the flexibility.


Sent from my iPhone using Early Retirement Forum
captain3d is offline   Reply With Quote
Old 07-27-2017, 06:39 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
imoldernu's Avatar
 
Join Date: Jul 2012
Location: Peru
Posts: 6,337
I would guess you needn't be concerned with this, but dependent on one's financial situation, the current provisions of Medicaid provide some security for the surviving spouse, if assets should be depleted due to high medical or nursing home costs over an extended period.

Understanding how this works could be a factor in the buy/rent decision. Note the 5 year lookback.

Brief explanation here, on post #34.

http://www.early-retirement.org/foru...ml#post1214332

Note that after the death of the surviving spouse, the state may place a lien on the home for the expenses paid by medicaid, but in the interim, a continuation of living in the security of the homestead.
imoldernu is offline   Reply With Quote
Old 07-27-2017, 07:07 AM   #11
Thinks s/he gets paid by the post
Cobra9777's Avatar
 
Join Date: Jul 2012
Location: Texas
Posts: 2,070
This NYT online tool is the best I've found: Is It Better to Rent or Buy?
__________________
Retired at 52 in July 2013. On to better things...
AA: 55% stock, 15% real estate, 27% bonds, 3% cash
WR: 2.7% SI: 2 pensions, some rental income, SS later
Cobra9777 is offline   Reply With Quote
should I buy or rent at age 64
Old 07-27-2017, 09:23 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Oct 2009
Posts: 1,111
should I buy or rent at age 64

Whenever I think about swapping homeownership for the "nirvana" of renting (nirvanic state achieved thru absence of maintenance worry) I come up short because of my concern about "rent" inflation.

If where I wanted to live had good rent control laws (as in my old renting days in NYC before we bought for example) that offered decent protection against out of control rent increases it could be a viable alternative. However, to be "naked" potential outsize rent inflation is not a risk I would personally want to take in my sixties.
LARS is offline   Reply With Quote
Old 07-27-2017, 09:30 AM   #13
Dryer sheet aficionado
 
Join Date: May 2010
Posts: 47
No one ever argues for capping out of control house appreciation :-)
captain3d is offline   Reply With Quote
Old 07-27-2017, 10:38 AM   #14
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 14,563
Quote:
Originally Posted by LARS View Post
Whenever I think about swapping homeownership for the "nirvana" of renting (nirvanic state achieved thru absence of maintenance worry) I come up short because of my concern about "rent" inflation.
A problem that is often eliminated by buying in a relatively small, well run condo association. That's what we did two years ago and it has been wonderful.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 07-27-2017, 11:52 AM   #15
Thinks s/he gets paid by the post
 
Join Date: Oct 2009
Posts: 1,111
Quote:
Originally Posted by captain3d View Post
No one ever argues for capping out of control house appreciation :-)


Actually every single person NOT YET on the property ladder might argue, and rather convincingly, that point with you...
LARS is offline   Reply With Quote
Old 07-27-2017, 11:54 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Oct 2009
Posts: 1,111
Quote:
Originally Posted by braumeister View Post
A problem that is often eliminated by buying in a relatively small, well run condo association. That's what we did two years ago and it has been wonderful.


100% agreed. We're convinced our next more will either be condo or townhouse, which mitigates maintenance issue and avoids rent inflation exposure.
LARS is offline   Reply With Quote
Old 07-27-2017, 11:55 AM   #17
Full time employment: Posting here.
FIREmenow's Avatar
 
Join Date: May 2013
Posts: 755
Quote:
Originally Posted by LARS View Post
Actually every single person NOT YET on the property ladder might argue, and rather convincingly, that point with you...
....or whose property taxes are a significant portion of the budget.
__________________
Believe me, my young friend, there is nothing - absolutely nothing - half so much worth doing as simply messing about in boats. ― Kenneth Grahame, The Wind in the Willows
FIREmenow is offline   Reply With Quote
Old 07-27-2017, 01:56 PM   #18
Dryer sheet wannabe
 
Join Date: May 2010
Posts: 14
great discussion and much appreciated!!! here are some more assumptions:
400k profit on existing house
350K potential new house cost in Everett wa or arlington wa
2000 dollars to rent/month if we don't buy
should we buy and pay off house?
buy and take out mortgage ?
or simply rent...?
I know some have answered but brucethebroker asked for more assumptions and wanted to provide that and also appreciate the other insights that have been offered. this is a great community of wisdom that we appreciate!!!!! hope this extra assumption data helps...
ontap55 is offline   Reply With Quote
Old 07-27-2017, 04:20 PM   #19
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 14,563
Quote:
Originally Posted by ontap55 View Post
350K potential new house cost in Everett wa or arlington wa
2000 dollars to rent/month if we don't buy
You're in that gray area that captain3d mentioned.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 07-27-2017, 05:23 PM   #20
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 3,730
Quote:
Originally Posted by Moemg View Post
Since you are moving to live near a grandchild I would rent . Children change jobs and move so you may be stuck somewhere you really do not want to be .
+1

Our 2 grandkids have moved 3 times in 6 years. Trying to follow them around would have been a fool's errand. I would vote for renting if you must be close to the grand kids. For us, we went where we wanted to live and then we said "the planes fly both ways." YMMV
__________________

__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau 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
Should I buy or rent? FI by 2024 Other topics 23 01-16-2016 11:40 PM
So, do you feel your age? Act your age? Like your age? vickko Life after FIRE 84 04-10-2010 01:47 PM
Recession over? Buy, buy, buy? NW-Bound FIRE and Money 42 05-27-2009 04:53 PM
When you buy a car, what age or age range do you usually buy? cloudeleven Other topics 21 05-27-2008 08:20 AM
rent stabalization and rent control mathjak107 Other topics 2 04-10-2006 04:56 PM

» Quick Links

 
All times are GMT -6. The time now is 08:14 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
×