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-   -   should I buy or rent at age 64 (https://www.early-retirement.org/forums/f28/should-i-buy-or-rent-at-age-64-a-87805.html)

ontap55 07-26-2017 03:37 PM

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.

brucethebroker 07-26-2017 03:45 PM

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.

gauss 07-26-2017 03:47 PM

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

Moemg 07-26-2017 04:21 PM

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 .

Blue Collar Guy 07-26-2017 04:43 PM

Quote:

Originally Posted by Moemg (Post 1914854)
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.

davef 07-26-2017 06:03 PM

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.

ontap55 07-26-2017 07:36 PM

Great suggestion. I had no idea those calculators existed!

RobLJ 07-26-2017 07:53 PM

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.

captain3d 07-27-2017 02:39 AM

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

imoldernu 07-27-2017 06:39 AM

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.

https://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.

Cobra9777 07-27-2017 07:07 AM

This NYT online tool is the best I've found: Is It Better to Rent or Buy?

LARS 07-27-2017 09:23 AM

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.

captain3d 07-27-2017 09:30 AM

No one ever argues for capping out of control house appreciation :-)

braumeister 07-27-2017 10:38 AM

Quote:

Originally Posted by LARS (Post 1915128)
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.

LARS 07-27-2017 11:52 AM

Quote:

Originally Posted by captain3d (Post 1915131)
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... [emoji6]

LARS 07-27-2017 11:54 AM

Quote:

Originally Posted by braumeister (Post 1915174)
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.

FIREmenow 07-27-2017 11:55 AM

Quote:

Originally Posted by LARS (Post 1915212)
Actually every single person NOT YET on the property ladder might argue, and rather convincingly, that point with you... [emoji6]

....or whose property taxes are a significant portion of the budget.

ontap55 07-27-2017 01:56 PM

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...

braumeister 07-27-2017 04:20 PM

Quote:

Originally Posted by ontap55 (Post 1915296)
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.

Koolau 07-27-2017 05:23 PM

Quote:

Originally Posted by Moemg (Post 1914854)
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


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